project

PROJECT REPORT ON CADMACH MACHINERY BY DHRUV SONI

GENERALINFORMATION


1.1 PHARMACEUTICAL MACHINERY IN INDIAN

MARKET

India, with more than 17,000 formulation units, offers tremendous scope

for the pharmaceutical machinery manufacturers to exploit the potential by providing

necessary machinery by ensuring proper design, ease of user application, simple

maintenance and also validation protocol for the new equipment that are essential for the

pharmaceutical companies.

The Indian pharmaceutical industry is catering to the wide spread

spectrum of tableting, capsulation, liquid, injectable, dry syrup/powder, ointment for

formulation processing, material handling, R & D equipment and instrumentation,

coating, bulk drug plant installation etc.

In India, there are around 800 pharmaceutical machine manufacturing and

allied utility service units in the small and medium sector. Though only few companies

have made a mark in the area of branded market, a majority of these units undertake job

works and supply of custom made machineries taking the location advantage of buyers.

India is the fourth largest manufacturer of medicines in the world,

although in terms of turnover the contribution of the Indian Pharmaceutical Industry is

less than 2% of the global total, it is a clear indication that the prices of medicines in

India are the lowest in the world. The manufacturing facilities in India are being

upgraded to the standards of the regulated markets. Today, India has the highest number

of FDA approved facilities outside USA.

Packaging technologies which show substantial potential for growth are

horizontal and vertical form-Fill-Seal machines for different goods, be it solids, granules

or liquids. Blister packing and Cartoning machines, Form-Fill-Seal machines for flat-top-


and-bottom models, bag-in-box systems, sterilization and filling technologies for vials

and ampoules, as well as filling and sealing of metal containers are also technologies with

rising local demand.

There are more than 350 facilities in India’s pharmaceutical-machine

manufacturing industry, in categories like instrumentation and process control, lab

equipment, pharma research and development tools and techniques, pharmaceutical

machinery, packaging material and machines, plant design and engineering,

pharmaceutical process technology and software.

India’s pharmaceutical industry has approximately 3,000 active

pharmaceutical ingredient-manufacturing facilities, nearly 5,000 formulation facilities,

and 2,000 other pharmaceutical facilities. Out of these, 300 facilities are in the medium to

large range. Some sub-sectors, including biotechnology, bioinformatics, contract research

and manufacturing services, clinical research organizations, and pharmaceutical

machinery manufacturing, are growing in tandem with the larger pharmaceutical

industry, as experienced human resources and investments spill over into these areas as

well.

If you have a product, which is replicable, scalable, and does not require

after sale support or customization, then you cannot compete with the Chinese. But if you

are talking about pharma machines, then it is just common knowledge that you need the

necessary customization or after sales support and documentation for operating and

maintenance. This is where Indian pharma machine manufacturers have the advantage of

fluency in English and greater technology-orientated skills.

An increasing number of foreign pharmaceutical-machine manufacturers

also have recognized India’s achievements and evolution in the industry. Indian machines

are manufactured and used in accordance with international standards and do not hazard


the inspection and approval of their facility. This is one of the many reasons that India

has the most FDA approved facilities in the world.

The recognition of the Indian pharmaceutical machineries and allied

industries supplies has achieved a well-respected status worldwide. In the recent past, the

exposure of Indian Pharma machinery manufacturers to the United States and European

markets has definitely enhanced the quality levels of Indian made machines to a great

extent but the installations have been done mostly I n smaller set ups or companies

owned by Asians. Due to the fact that installations of Indian made machinery at

multinational pharmaceutical companies are very negligible, the real challenge is based in

their ability to penetrate in this segment, which is still the domain strength of machinery

manufacturers from the western world.

To meet the parameters of the challenge and get into this domain, will

definitely transform the outlook in terms of the global acceptability of the Indian brands.

Therefore, this becomes the most significant factor for the Indian players who will need

to address this issue and make necessary preparation to achieve this success like some of

the Indian pharmaceutical drug manufacturers have done in the area of drug

manufacturing and formulations.

The global exposure of the Indian Pharmaceutical industry, especially

during the last 6-7 years, has nurtured the growth and demands on the Indian

pharmaceutical machinery manufacturers are very high. On account of the Indian pharma

machinery manufacturers being highly fragmented and most of them highly dependent on

the business coming from the small and medium scale drug formulators, the pricing

structure of the plant and machinery is highly skewed.

It is only a matter of time that small scale machinery manufacturers will

not be able to keep updated with the latest requirements which could lead to


consolidation leaving only large players to remain in this business inn the

long run. One can already see many well known international machinery manufacturers,

which are getting out of business by selling their brands to larger players which are able

to put more money on new product development to keep pace with the new requirements

of the global pharmaceutical industry.

A country like India that has a large population of 1,200 million and is

growing at 2%, which is means adding a population of almost 24 million every year,

which more than the total population of Canada. Looking to the social-economic

condition of India, our country will continue with high poverty levels, which means

cheaper medicines have to be in production for many years to come, which will keep

small manufacturers alive for several years. Therefore, both big players and small players

will continue to thrive in the pharmaceutical machinery segment at least for some more

years.

There is definitely a change in the procurement trend in the

Pharmaceutical industry and this is mostly to do with the acceleration of export, and the

inspection of pharmaceutical units carried out by the international agencies. Many Indian

pharmaceutical companies are importing expensive and high technology machinery

mainly from Europe, US and Korea.

However, the Multinational companies are still continuing with their

strategy of third party manufacturing or acquiring Indian pharmaceutical companies that

have strong manufacturing base in drugs and formulations.

The reason for the lack of pricing power has been already explained above

and due to poor expertise or inadequate spend on product research by most of the Indian

players, this is blocking their path of going big in the international market.

The other important challenge is the inability to attract bright talent and

also the retention of professionals in the machinery manufacturing sector.


With European companies setting up shop in India during last few years,

the future trend of Indian pharma machinery industry could change drastically. This

change could evolve into the production of newer technologies and also attracting better

talent into this industry. However, this will create a situation for some of the Indian

machinery manufacturers to sell off their business or join hands with foreign

manufacturers in order to remain in the business.

As sterile product manufacturing is a smaller segment compared to oral

solids and liquids, which is produced in a mass scale. The sterile product manufacturing

has stringent requirements and is normally high priced; therefore demand supply situation

of these types of machinery is altogether different. The technology involved for these

products being very critical the number of players in this segment is also quite limited.

The change in the outlook of the Indian pharma machinery on international platform will

certainly make even stronger foundations along with the recognition of the

product/services.


1.2 HISTORY ABOUT CADMACH

The CADMACH Works & HO spread across 20,000 square meters of land located in

Vatva the industrial township on the outskirts of Ahmedabad, Gujarat.

CADMACH – Synonym of Care and Dedication for Pharmaceutical Industry by

continuous Innovation, Quality and high standards of performance of pharmaceutical

machinery.

CADMACH has mastered expertise to make / supply ORAL DOSAGE & INJECTIBLE

machines to leading Pharmaceutical Companies GLOBALLY.

The CADMACH complete ranges of machines are exported Worldwide. More than 80%

of the tabletting machines in the various pharmaceutical companies in India bear the

CADMACH logo. CADMACH - a synonym for machines of latest design, precision,

uncompromising quality giving High Performance & uninterrupted output over the years.

CADMACH Regional Offices major cities in India have access to every customer by

giving Technical Support & after sales services.

Innovations / Quality / After sales technical services is a way of life at CADMACH. The

Quality Control Department is well equipped with latest precision instruments to adhere

to the stringent quality parameters from procurement of raw material, all stages of

production till Final Machine assembly / finished.

Quality Control department continuously upgrades the inspection checkpoints based on

customer feedback to ensure better quality of products.


1.3 INTRODUCTION OF THE COMPANY

‘CADILA HEALTHCARE’ is a well known pharmaceutical company. Chairman of

CADILA HEALTHCARE decided to develop one company which gives comprehensive

support in the pharmaceutical machinery industries. Because of his efforts ‘CADMACH’

was born in 1967. Today CADMACH is one of the largest company in India and

number one in Asia, engaged in the manufacturing of a wide range of pharmaceutical

machinery. CADMACH’s special emphasis on tabletting, injectables, liquid & ointments

and allied machinery, punches & dies, spares of machinery.

CADMACH has now become a national leader in the field of

pharmaceutical machinery. It is proven fact that more than 80% of the tabletting

equipment in today’s various pharmaceutical companies in this country bears the

CADMACH mark.

CMS- Single Stroke Tabletting Machine Multilayer Tablet Press


Pharmaceutical machinery is research intensive product. So in

CADMACH R & D has to be carried out in various areas like capacity of machine, new

product development, modification in existing product etc. A continuous effort to

improve technology has been made in all areas of operation of the company. All

technology adopted by the company has been developed in house since technology has

been efficient.

CADMACH’S QUALITY CONTROL department is well equipped.

CADMACH also has technically sound staff. Company makes changes in machines

according to feedback of their customers.

CADMACH represents the CADMACH group worldwide & has been

very successful in penetration countries like USA, Italy, Germany, South Africa &

Australia.

CADMACH has developed appropriate capabilities to compete in the

national & international market. This includes a strong domestic presence, sample

exposure in pharmaceutical machinery manufacturing & marketing areas. Zero defect

products, backward integration in the areas of components, sub-assemblies/assemblies,

right markets, buyers, products, packaging & promotion, sound financial background &

concentration global presence.

With new markets opening up for the Indian Pharmaceutical Industry,

requirement of the quality machinery is expanding. CADMACH with its strength &

experience of over two decades is well poised to explore new avenues.


1.4 FORM OF THE COMPANY

Name : Cadmach Machinery Co. Pvt. Ltd.

Year of incorporation : 1967

Factory & Head office : Plot no. 3604/3605, G.I.D.C. Estate,

Phase-IV, Vatva, Ahmedabad.

Registered office : 16, Azad society,

Ambavadi,

Ahmedabad.

Corporate office : Zydus Tower,

Gandhinagar - Sarkhej Highway,

Opp. Iscon Temple,

Satellite, Ahmedabad.

Website : www.cadmach.com

Business type : Manufacturer

Products/Services : Pharmaceutical Machineries, Tablet

Press, Punches & Dies and Spares

http://www.cadmach.com/


Board of Directors : Mr. J.V. Khambhatta (M.D. & Chairman)

Mr. P.R.Patel (Executive Director)

Mr. V.J.Khambhatta (Executive Director)

Bankers : State bank of India

Auditor : Mr. M.M. Shah & Co.

Chartered Accountant,

3,2nd floor, H.K.House,

Ashram road, Ahmedabad.


1.5 PIONEERS & DEVELOPERS OF THE COMPANY

1. Late Mr. R.B.PATEL : He was Chairman of CADMACH. CADMACH is a part

of Cadila Healthcare & established by him.

2. Mr. P.R.PATEL : He is Executive Director & Chairman of CADMACH &

actively participated in the development of the company.

3. Mr. J.V.KHAMBHATTA : He is a co-founder of the company and responsible

for making it one of the largest tabletting press manufacturing in the world. He is

responsible for developing over 50 different machines since 1967. He is M.D. of

the company and handles development activities in the company.

4. Mr. V.J.KHAMBHATTA : He is incharge of day to day operation at

CADMACH & managed to increase the sales & production at good growth rate.

He is technocommercial person & has developed export market in region like

Australia & Italy.

5. Mr. P.H. VACCHARAJANI : He is Deputy General Manager & handles

international marketing, Marketing research, Finding new customers, new

application of product, organize sales promotion and customer’s satisfaction. He

has 19 years of experience in the pharma and allied industries. He has been with

CADMACH since 1984.

6. Mr. K.B. AMIN : He is the Senior Commercial Manager in the CADMACH. His

contribution is much more in CADMACH for more than 30 years. He handles

activities of Co-ordination between production, administration and marketing

department.


1.6 QUALITY POLICY

At CADMACH, we would ensure quality in every aspect of business, whether it is

product, people or our response to customers.

We always deliver defect-free and user-friendly products and services, which are of latest

technology and meeting stringent quality parameters at every stage.

We deliver our products in time and will continuously improve our business process to

meet the needs of our customer and work environment.

We believe in teamwork at all levels to achieve Right Quality, Timely Services and

Excellent Workmanship.


1.7 VISION OF THE COMPANY

Products / Machines indirectly connected with Public Health will be designed /

manufactured those become pervasive around the WORLD.

We will create significant image of “Made in India” in ALL parts of World.

CADMACH philosophy – Success of an organization is Continuous Innovation, Quality,

Customer Satisfaction & Human Resources / Potential to make GOOD team.


1.8 MISION OF THE COMPANY

Anyone can’t establish business without any mission. Each & every company has certain

goals & objectives. Mission defines long term vision of the company in terms of what it

wants to be and whom it wants to serve.

“ADVANCEMENT THROUGH TECHNOLOGY” is mission

statement of the CADMACH.


1.9 ACHIEVEMENTS OF THE COMPANY

CADMACH is the only Indian company in this segment to receive the

import substitution award, twice from the government of India.

It has received the best Performance Award for Export Excellence, thrice

from the Engineering Export Promotional Council.

1.10 ORGANISATION STRUCTURE


Boar of Directors

Executive Director(Shri P.R. Patel)

R & D(Mr.B.K.Chhniyara

)

Design mgr.(D.P.Chhatralia)

R&D -Sr Mgr.(Mr.H.G.Pishavadra)

Chairman & M.D.(Shri J.V.Khambhatta)

Executive Director(Shri V.J.Khambhatta)

Technical Commercial

Pro.Dgm(Mr.V.R.Patel

)Production

(Mr.M.R.Mistry)

Dgm-QC(ShriD.M.Bagdai)

Sr.Mgr. Planning

(Mr. R.M.Patel)

Manager-Stores(Mr.H.V.Patel)

Account-DgmMr.G.K.Barot

Mkt.-Dgm(Mr.P.H.Vachhrajani)

Mkt.Head(Domestic)(Mr.Anil Shukla)

Costing-Dgm(Mr.P.D.Modh)

Commercial(Mr.K.B.Amin

)

H.R. Manager(Mr.Bakul Vyas)

Personnel Security

Manager(Mr.K.L.Rathod)


1.11 GOALS AND OBJECTIVES OF THE COMPANY

1. To increase the market share.

2. To continue better image of the company.

3. To manufacture innovation product.

4. To sell more equipment.

5. To increase customer satisfaction.

6. To reduce cost while producing more.

7. To increase employee satisfaction.

8. To boost export & thereby save foreign exchange.

9. To improve quality of product.


1.12 CADMACH – ALL INDIA NETWORK

Bangalore : N. J. Chamber, Third Floor, 22/2, Venkatswamy Naidu Road, Opp. Hotel Harsh, Taskar Town, Bangalore-560051 Ph.: 080 - 41494140 TeleFax : 080- 22861615

Chennai : "Shoba" Flat No:D-2, Third Floor, No:12, 10th Avenue, Ashoknagar, Chennai - 600 083 Ph. : 044-24899710 TeleFax : 044-24897804

Hyderabad : 302, Shamshiri Estates, 11-5-423, Redhills, Lakdi-Ka-Pool, Hyderabad-500004. Ph.:040-66666301 Fax:040-23372127

Kolkatta : 52, Rishi Aurobinda Sarani, Flat no. 1, Ground Floor, Kolkatta – 700 900. TeleFax: 033-25315430

Mumbai : 101/B, Poonam Chambers, 1st Floor, Shivsagar Estate, Dr. Annie Besant Road, Worli, Mumbai - 400 018


Ph. : 022-24948753 / 24936612 / 24973430 Fax : 022-24938042

Delhi : 7-K, Gopala Tower, 7th Floor, 25 Rajendra Place, New Delhi - 110 008 Ph. : 011-25742842 Fax : 011-25733329

Ahmedabad : CMC MACHINERY Plot No. 3604 & 3605, GIDC, Phase IV, Vatva, Ahmedabad 382 445. INDIA. Phone No: +91-79-25841491/92/93,25841817/53, Fax No: +91-79-25842602 Email : [email protected]

CADMACH – INTERNATIONAL NETWORK

USA : CMC Machinery LLC 210, Carnegie Center, Ste 103, Princeton, NJ 08540, USA Phone: 609-750-8880 Fax. : 609 716 6002 E-mail : [email protected]

1.13 INNOVATION & TECHNOLOGY

mailto:[email protected]

mailto:[email protected]


CADMACH attributes its success to NEW

DEVELOPMENTS/INNOVATIONS by strong team of Design & Development.

CADMACH Design & Development Team is equipped with latest tools to Design &

Develop tomorrow’s NEED of Pharmaceutical Industry Today. CADMACH has been

always FIRST in Indian Pharmaceutical Industry to provide machines as per International

Standards.

Latest INNOVATION after Tablet Press C 100 is C 300.

T3 (Tableting-Tools-Technology) has been the driving force behind the

growth of CADMACH.

CTX II high speed double C 100 high speed single rotary tablet press. sided rotary tablet press

with exchangeable turret.

1.14 COMPETITOR’S DETAILS

The competitors of CADMACH MACHINERY Co. PVT. LTD. are as

follows:

CHAMUNDA PHARMA MACHINERY PVT. LTD.


Chamunda Pharma Machinery Pvt Ltd was founded in 1981 in

Ahmedabad , INDIA when a team of engineers designing a tablet press

found that available tablet press technology couldn't meet the stringent

demands of the pharmaceutical industry in terms of excellence in design,

quality of engineering and service, delivery as per the customers' schedule

and at affordable pricing. The chief founders of the organization are Mr. J.

J. Soni (Chairman) and Mr. M. P. Suthar (Technical Director).

CEMACH MACHINERIES LTD“CEMACH” had laid it’s foundation stone before almost 20 years with a

clear vision “to be the best solution provider in tablet tooling

technologies”. A technocrat dedicatedly started catering pharmaceutical

industries in mid 80s & grown high as a renowned multi function pharma

equipment supplier in India.

PAM MACHINERYPAM is a member of the ACG Worldwide and is the flagship engineering

company of the group. It is one of the largest Asian Pharmaceutical

machinery company and probably the only one in the World which builds

the entire range of capsule filling machines in-house. PAM operates in 84

countries around the globe and is a market leader in many countries.

KARNAVATI ENGINEERING LTD.Karnavati Engineering Ltd (KEL), is a well-established( 1981 AD)

manufacturer of “RIMEK” Brand of precision components and machinery

for pharmaceuticals and allied industries. KEL has been at the helm of

technology revolution in the field of Pharma machinery for a decade and

has become synonymous with tablet press series worldwide.


PANKAJ INDUSTRIESWith more than two decades of experience, Pankaj Industries is one of

leading manufacturers and exporters of pharmaceutical machineries,

pharmaceutical packaging machine and spares. Pankaj Industries is the

flagship of renowned Pankaj Group of Industries. Our meticulous

planning, efficient management of manpower and optimal utilization of

resources has enabled us to successfully cater to the requirements of our

global clients.


PRODUCTION INFORMATION

2.1 INTRODUCTION OF PRODUCTION

Operation management is one of the major departments of any

organization. It plays a crucial role in all the activities of company management. All the

business activities revolve around the production process.

The term product refers to the creation of goods and services to satisfy the

needs and wants of the consumers. The production process is nothing but the step-by-step


conversion of material form to another. It is the process comprises of various inputs and

then these inputs are processed to convert them into required form of output. Here, the

inputs can be in the form of tangible goods or intangible goods.

Production department is the most vital aspect in a set of organization because the

success of the industry depends upon the targets that are fulfilled by the production

department. Thus, it is essential to develop a production structure in the industry.

2.2 PLANT LAYOUT


2.3 PRODUCT PROFILE

CANTEEN PERSONNEL DEPARTMENT

FABRICATION SHOP

BUFFING &FAB.

M/C SHOP

STORESDEPT.BUFFING

ZONE

HEAT TREATMENT SHOP

M/C SHOP

PRODUCTION OFFICE

TOOL CRIB

CNCSHOPPLANNINGDEPT.

ASSLY. SHOP

TRIALROOM

R & D DEPT.

PAINT SHOPMACHINE DISPATCHING

RECEPTION OFFICE

PUNCH & DIE SHOP


There are different types of machines are produced by the company. They are

given as below:

NAME OF MACHINE TYPES OF MACHINETABLETTING SECTION(MACHINE):

Single stroke tabletting machine(HOKO) CMS-15

CMS-25

Single stroke machine SSF3

16-station rotary machine CMD3-16

Double sided rotary machine CMB3-27

CMB3-35

CMB3-45

Square model single sided rotary

tabletting machine

CMD4-20

CTX high speed rotary tabletting

machine

CTX-26

CTX-32

CTX-40

CTXII-37

Square model double sided rotary

tabletting machine

CMB4-27

CNB4-35

CMB4-45

CADPRESS CPD-37

CPD-45

CPD-55

CPD-61

CADPRESS-II CPD-II 37

CPD-II 45

CPD-II 55

CPD-II 61

CADPRESS-IV CPD-IV 45


CPD-IV 55

CPD-IV 69

CPD-IV 75

C-100

C-300

C,SI-650

Rotary Pellting Press(RS-II) RPP-19

RPP-21

Press Coat CPC-500

CPC-900

CU rotary tabletting machine CU-20

CU-27

CU-30

Heavy duty rotary tabletting machne CD3RY-16

CD3RY-23

12-Station slugging machine CMS-3

CMS-12

ALLIED PRODUCT OF

TABLETTING MACHINE:-Granulator CMJ-8

CMJ-12

CADMILL CMC/CM

Slaving,grading & straining machine CSGS-500

CSGS-750

Mixer CMH

CMH-4

Coating macine CMP-30

CMP-36

CMP-42

CMP-48


CMP-60

CMP-72

Drying Oven-48 Tray machine CMO-100

CMO-200

CM0-300

Dry Oven-24 Tray machine CMNFS

Dust extraction unit 700-b

De duster machine CMDD/N

Hot air blower

Roll Compactor CMRC200/50

CMR200/70

CMR200/100

CMR200/150

Tablet hardness tester CMTT

Strip packing machine CMSP-2

CMSP-4

CMSP-6

INJECTABLE MACHINE:Automatic ampoule filling & sealing

machine

CAF-04

Automatic ultrasonic cleaning machine CAVC-07

LIQUID MACHINE:Colloid mill CMCM5

OMMENT MACHINE:Tube filling machine CTF

Triple roller mill CTR-100


MARKETINGINFORMATION

MARKETING DEPARTMENT

Marketing is an activity of directing, coordinating, organizing and

controlling sales activity. Main ideology of marketing department is to increase sales of

the company by making efforts by satisfying customer needs and wants. Marketing


involves advertising and propaganda of products; it has to watch over sales and distortion

activities.

WORKING OF DEPARTMENT

Sales department or sales person convince customer by their sales

activities. Communication skills will help to get orders.

1) Purchase order from customers with complete description and delivery dates are

fixed and given to the zonal office.

2) The policy of management of the organization is to take 50% money in advance.

3) Delivery dates then given to PPC department.

4) Conformation of order issued after payment is received in head office in

Ahmedabad.

5) After completion of the product and approval of QC department, the products are

sent to stores.

6) Perform invoice is sent to customer carrying all details about product produced

and copy is sent to main office.

MARKETING is a social and managerial process by which individuals

and groups obtain what they want and need through creating, offering and exchanging

products of value with others.

Marketing is the wide term, it doesn’t merely include the efforts which

affect transfer in ownership of goods and care for their physical distribution. But it is a

total system of interacting business activities designs to plan, price, promote and

distribute wants – satisfying products and services to present and potential customers. It

represents a distinct philosophy of business that has emerged over the recent years is the

purpose of any business to create a customer.


Thus, the modern concept of marketing focuses on the consumer and the

satisfaction of his need. That’s why modern marketing is said to the consumer oriented in

its approach.

Marketing is the main reason for the existence of any business. In this age

of rapid change, marketing is the spring board of all business operations.

With the view to reaching the pharmaceutical production centers

spread in the nook & corner of India, CADMACH Marketing set up is well defined

and well organized, having its regional offices in major metros & mini metro towns

of India. Full fiedged CADMACH offices are located in Mumbai, Delhi, Calcutta,

Chennai, Bangalore & Hyderabad manned by well qualified, dedicated & highly

experienced sales staff. After Sales Service Centres are the part of the regional sales

offices which keep a live wire contact with the varied clientele so as to ensure

minimum machine downtime.

3.1 CADMACH’S BRANCH OFFIECES SALES

BRANCH OFFICE ACTUAL SALES ACTUAL SALES BUDGETED


YEAR2007-08

(Rs. In lakhs)

YEAR2008-09

(Rs. In lakhs)

YEAR2009-10

(Rs. In lakhs)AHMEDABAD 696.58 706.76 750.00

MUMBAI 1410.87 1549.61 1850.00

HYDERABAD 346.32 567.39 550.00

BANGALORE 336.28 210.90 350.00

CHENNAI 107.36 214.86 270.00

KOLKATA 138.26 223.63 140.00

DELHI 807.67 624.28 990.00

CMC (EXPORT) 1332.16 1287.19 2000.00

TOTAL 5175.50 5384.62 6900.00

CADMACH export its product through CMC machinery (A

Partnership firm of same management). CADMACH exports in major

countries like USA, Italy, Germany, South Africa, Australia, Indonesia,

Nigeria, Zambia, Bangladesh, Srilanka, Ghana, Canada, Malaysia,

Ravanda, Sudam, Egypt, Newzealand & gulf countries.

3.2 MARKETING OF THE COMPANY

At present, in the world there are 5 selling approaches are used.

1. Production concept.


2. Product concept.

3. Selling concept.

4. Marketing concept.

5. Societal marketing concept.

Marketing approach says that we have to produce only those goods which

satisfies needs & wants of target market with efficiency & effectiveness. With view to

reaching the pharmaceutical production at present, in the world there are 5 selling

approaches are used spread in the nook and corner of India, CADMACH marketing setup

is well defined and well organized, having its metros and mini-metro towns of India.

CADMACH has six branch offices and a head office all over India.

NAME OF BRANCH AREA COVEREDAhmedabad Gujarat,M.P.,Rajasthan

Bangalore Karnataka

Calcutta W.bengal, Orissa, Bihar & other

eastern state

Chennai Tamilnadu & Kerala

Delhi U.P., Punjab, Hariyana, J.K.

Hyderabad Andra Pradesh

Mumbai Maharashtra, Goa

3.3 MARKETING PROCCESS AT CADMACH


3.4 MARKET SEGMENTS

PLANNING DEPARTMENT

ISSUE OF JOB ORDER

PLACING OF ORDER

REVERT WITH COMMENT OF URS

URS

MARKETING

INQUIRY

PRODUCTION DEPARTMENT

FAT

DISPATCH


PHARMECEUTICAL INSTRUMENTATION AND PROCESS CONTROL

PHARMA LAB EQUIPMENTS

PHARMA R & D TOOLS TECHNIQUES

PHARMACEUTICAL PLANT DESING AND ENGINEERING

PHARMACEUTICAL MACHINERIES

PHARMACEUTICAL PACKAGING MATERIALS AND MACHNIERY

PHARMACEUTICAL PROCESS TECHNOLOGY AND SOFTWARE


CADMACH has targeted pharmaceutical companies, chemical industry,

fertilizers company. The following are the targeted customers of CADMACH

Machinery Co. Pvt. Ltd.

1. Ranbaxy Pharmaceutical Ltd.

2. Cadila Healthcare

3. Aventis Pharma Ltd.

4. Cipla Ltd.

5. Hindustan Latex Ltd.

6. Bajaja Healthcare Ltd.

7. The Zandu Pharmaceutical Works Ltd.

8. Accent Pharma

9. Piramal Healthcare ltd.

10. Daffodills Pharma Ltd.

11. Dr. Reddy’s laboratories

12. Delhi Institute of Pharma Science & Research

13. Sun Pharmaceutical Ltd.

14. Torrent Pharmaceuticals Ltd.

15. Aristo Remedies Ltd.

16. Watson Pharma Pvt. Ltd.

17. Orchid Chemicals and Pharma Ltd.

18. Shree Baidyanath Ayurved Bhawan Pvt. Ltd.

19. Ayurveda Rasashala

20. Alchemist Ltd.


3.5 TYPES OF POSITIONING

Attribute Positioning

Benefit Positioning

Use or Application Positioning

User Positioning

Competitor Positioning

Product Positioning

Quality Positioning


3.6 PRICING POLICY

Price is the exchange value of the product. Price can be determined

through cost factor, demand and competition factors. Cost of the production serves as the

floor for the basis of the pricing of the product. It is the crucial element of marketing mix.

On the other it is simultaneously a strategic element as it is related to the perception of

quality. Without price there can’t be marketing. Price denotes the value of a product or

service expressed in money.

CADMACH follows the simple strategy of fixing the price of its

products. It considers three factors into consideration, i.e., prices of the raw material,

Cost of products and competitors price, at the time of fixing the price. CADMACH

implement the pricing policies that is Cost-Plus Pricing policy.

PRICING

Cost of Raw material

Pricing

Competitor’s pricing

Cost of production


While selling machineries, CADMACH concentrates on cost of raw

material and cost of production only. It do not concentrate competitors price because of

its quality product and brand name. CADMACH gets twice or thrice the price of

machine than its customer because of its Brand Name and Quality.

But, while selling punches & dies and other spares, CADMACH needs to

concentrate all the three of the above, i.e. cost of raw material, cost of production and

competitor’s price.


3.7 CHANNELS OF DISTRIBUTION

Distribution, in the marketing content, is the process of making the

product or services available to the consumer and involves to the end users. Marketing

intermediaries work as a link between producers and users and fill the gaps created when

the direct exchange between the producers and the end users is not possible or feasible. A

manufacturer or supplier may sell or supply the product to the consumer or may take help

of intermediaries to make the same available to the end user.

There is various type of distribution channels through which the producers

can move the goods to end users. For instance,

CADMACH do not include any intermediaries. It sells its product directly

to the customers. CADMACH is doing direct marketing.

Company

Customer


WORKING CAPITAL ARRANGEMENT THROUGH

BANK

4.1 INTRODUCTION


Finance management means rising of adequate funds at the minimum cost

and using them effectively in business. In other words, finance is concerned with the

financial problems of the business organization. Thus finance management dose not stop

at procuring the required finance. It has also to see that it is effectively utilized in

business.

“Financial management is concerned with such matters as, how a

business corporation raises its finance and how it makes use of it.”

In the business organization to manage the finance properly and to make

the financial management effective special finance department is created which mainly

perform the function like:

MAJOR FUNCTIONS OF FINANCE DEPARTMENT

Financial planning

Raising of funds

Allocation of funds

Financial control

4.2 CAPITAL STRUCTURECapital structure describes various kinds of securities with proportion.

CADMACH has a simple capital structure as it has issued only one kind of security, i.e.,

Equity Shares. It has got its capital through equity shares only. The capital structure of

CADMACH is as follows:


AUTHORISED CAPITAL (Amt in Rs.)

PARTICULAR Amount Amount

Equity share capital

25,000 equity share @100 each

5,000 1.5% Redeemable Non Cumulative

Preference share of Rs. 100 each





10,000 Unclassified shares of Rs. 100 each

25,00,000

5,00,000

5,00,000

5,00,000

10,00,000

25,00,000

5,00,000

5,00,000

5,00,000

10,00,000

Total 50,00,000 50,00,000

ISSUED CAPITAL

(Amt in Rs.)

PARTICULAR Amount

Issued, subscribed & paid up capital

22,200 equity share @100 each 22,20,000


Total 22,20,000

4.3 WORKING CAPITAL

Working capital is defined as “the axcess of current assets over current liabilities and

provisions.” In the annual survey of industries, Working capital is defined to include

“stocks of material, fuels, semi-finished goods and by products; cash in hand and bank

and algebraic sum of sundry creditors as represented by (a) outstanding factory payments

(b) purchase of goods and services (c) short term loans and advances and sundry debtors

comprising amounts due to the factory on account of sale of goods and services and

advances towards tax payments.” The term working capital is often referred to

“circulating capital” which is frequently used to denote those assets which are changed

with relative speed from one form to another.

CONCEPTS OF WORKING CAPITAL

1. GROSS WORKING CAPITALIt refers to firms investment in current assets.


2. NET WORKING CAPITALIt is the difference between Current Assets and Current Liabilities. If the

Current Assets exceed the Current Liabilities, it is a positive.

3. NEGATIVE WORKING CAPITAL This situation occurs when the Current Liabilities exceeds the

Current Assets.

4. FIXED WORKING CAPITAL Every firm is required to maintain a minimum balance of cash, inventory

etc. in order to meet the business requirements even in the slack season. This part of

the Current Assets is called as Fixed Working Capital.

5. VARIABLE WORKING CAPITAL Net Working Capital Minus Fixed Working Capital is called Variable

Working Capital.

ADEQUACY OF WORKING CAPITAL

Working capital should be adequate for smooth running of the operations

and uninterrupted flow of production. It will maintain credit-worthiness in the market

and meet all the current obligations including the payments of dividends to

shareholders. It enables the firm to avail cash discounts by making prompt payments.


Both the inadequate and excessive working capital are dangerous. If the

working capital is inadequate, the production will suffer, credit-worthiness in the

market is affected because of lack of liquidity. Low liquidity and law production may

lead to low profitability which in turn affects the liquidity.

The need for working capital cannot be overemphasized. Given the

objective of financial decision making to maximize the shareholders’ wealth, it is

necessary to generate sufficient profits. The extent to which profits can be earned will

naturally depend, among other things, upon the magnitude of the sales. A successful

sales programme is, in other words, necessary for earning profits by any business

enterprise. however, sales do not convert into cash instantly; there is invariably a

time-lag between the sales of goods and receipt of cash. There is, there fore a need for

working capital in the form of current assets to deal with the problem arising out of

the lack of immediate realization of cash against goods sold.

Therefore,sufficient working capital is necessary to sustain sales activity.

Technically, this is referred to as the operating or cash cycle. The operating cycle can

be said be at the heart of the need for working capital. ‘The continuing flow from

cash to suppliers, to inventory, to accounts receivable and back into cash is what is

called the operating cycle’. In other words, the term cash cycle refers to the length of

time necessary to complete the following cycle of events:

Conversion of cash into inventory;

Conversion of inventory into receivable;

Conversation of receivable into cash.

4.4 WORKING CAPITAL MANAGEMENT

Working Capital Management relates to the management of

current assets, current liabilities and their inter-relationship between them. The objective

of working capital management is that liquidity is to be maintained. If the liquidity is not


maintained, the production and profitability will be affected. There are three important

issues in formulating working capital policy as follow:

(A) Ratio of current assets to sales

(B) Whether working capital is to be financed by short-term financing or long-

term financing.

(C) If it is by both, the ratio of short-term financing to long-term financing, i.e.

25% of working capital is by long-term financing and balance 75% by bank

financing as per Tandon Committee recommendation within the Permissible

Bank Finance (PBF). Hence, it is finally stated that working capital

management is a policy decision in respect of liquidity and financing.

Fixed Assets are to be financed by own funds and long term liabilities

raised by unit while Current Assets are partly financed by long term liabilities and partly

by current liabilities and other short term loan arranged by unit from the bank.

The total C.A. with the firm may be taken gross W.C. Whether the net

W.C. may be calculated as under

Net W.C. = CA – CL

CADMACH Finance its WC through short term borrowing means from

CL any part of WC is not finance by long term liabilities.

The assessment of WC may be involved two aspect as under


The level of CA required to be held by any unit which is adequate for its day to

day function.

The mode of financing of CA


4.5 VARIOUS DETERMINANTS OF WORKING CAPITAL

OF CADMACH

CADMACH concern with an engineering and following factors are

influence working capital need of firm.

1. Nature & size of business.

2. Manufacturing cycle.

3. Credit policy-both for customers and from suppliers.

4. production policy.

5. Growth and Expansion activities.

6. Business fluctuations and seasonal fluctuations.

7. Profit margin and profit appropriation.

8. Volume of sales and price level changes.

9. Operating efficiency.

10. Inventory turnover.

11. Liquidity and profitability.

12. Inflation factor.

13. Attitude to risk.

14. Profit planning and control.

15. Changes in technology.

16. Degree of mechanization.

17. Government policy.

18. Issue of Bonus Share.

NATURE AND SIZE OF BUSINESS


CADMACH is a large scale industry and it manufacturing number of

varieties of pharmaceutical machinery. It has not mass manufacturing but it manufactures

the machines as per the orders placed by customers. More than 85% of the tabletting

equipments in today’s pharmaceutical companies is Indian subcontinent bear the

CADMACH mark and is exported to more than 25 countries worldwide. So it is facing

international competition. Number of pharmaceutical machines are running all over the

world, hence it has to keep some finished spare parts also in stock to fill full immediate

requirement of the customers, in case of machine maintenance and brake-down. Hence

CADMACH has invested substantial amount in working capital.

MANUFACTURING CYCLE Manufacturing cycle comprise of the purchase and use of raw material

and production of finished goods. CADMACH’S manufacturing cycle is longer, so

substantial working capital is invested in raw material, WIP parts and finished goods.

FIRMS’S CREDIT POLICYThe general sales policy of CADMACH is to dispatch goods after receipt

of payment. But firm has built its strong business relation with customers, it gives some

credit also to customers.

AVAILABILITY OF CREDITCADMACH purchased the raw material on credit, which helps to borrow

the less working capital from bank.


4.6 CADMACH CASH, CREDIT AND INVENTORY

MANAGEMENT

CASH MANAGEMENTCADMACH has not surplus funds.

CREDIT MANAGEMENTCompany is not selling any product on credit basis. So company has not

any problem regarding credit management. (Some product sales on credit basis only

because of long good relation with buyers)

INVENTORY MANAGEMENT CADMACH produces variety of products of pharmaceutical machines.

Production schedule prepared on the basis of machine order booked and raw material is

ordered out accordingly. Company produce number of machines and each machines

required number of parts. So, company’s material requirement is wider. Thus, it is

difficult to standardize EOQ, recording level, Safety stock level etc. It is also difficult to

categories moving, non moving and slow moving inventory.


4.7 RATIO ANALYSIS

Ratio analysis is a widely –used tool of financial analysis.It is defined as the systematic

use of ratio to interpret the financial statements so that the strengths and weaknesses of a

firm as well as its historical performance and current financial condition can be

determined.The term ratio refers to the numerical or quantitative relationship between

two items/variables.The relationship can be expressed as:

(1) Percentage.

(2) Fraction.

(3) Proportion of numbers.

These alternative methods of expressing items which are related to each other are,for

purposes of financial analysis, referred to as ratio analysis. What is the ratio do is that

they reveal the relationship in a more meaningful way so as to enable us to draw

conclusion from them.


RATIOS

1. Current Ratio:- As a conventional rule, a current ratio of 2:1 or more is considered satisfactory,

But it depends on each industries on peculiar problems. This ratio may between 1.5:1 to

3:1. In above ratio analysis statement of cadmach is not touch at standard point in all 4

years. So it is not satisfactory.

2. Quick Ratio:- This ratio gives information about company’s liquidity position. As the

conversion of inventory into cash will take time so it is excluded from current assets. It is

also called Acid-test ratio. Standard is 1:1. Referring the above ratio analysis statement

of cadmach, the quick assets are very low compare liabilities in all 4 years. It may

possible that company delay in paying its current obligation in time.

3. Profitability Ratio:- In this ratio gross profit ratio and net profit ratio are included. High ratio indicate

higher profitability & low ratio indicate lower profitability. In above ratio analysis

statement of cadmach, here profitability is very week.

4. Inventory turn over Ratio:- A ratio of 6 to 7 times is considered satisfactory. A high inventory turnover is an

indication of good inventory management. A low ratio indicates excessive

inventory.cadmach is an engineering company and its raw material consumption about

48%. Considering the consumption and long process cycle, inventory turnover ratio is not

touch to convention ratio, but gradually it is increase year to year, so it is good.


5. Fixed Turnover Ratio:- If the ratio is high, it indicates that the firm is over trading on its assts. If the ratio

is low, it indicates that the firm has an excessive investment in fixed assets. 3 times ratio

is convention ratio and a ratio of 5 or more time is an ideal. In all 4 years it reached more

than 5 times. It shows that without increase in fixed assets, company has utilized its fixed

assets efficiently.

6. Working capital turnover Ratio:- No.of factors affected W.C. Being an engineering company & lengthy process

cycle much more investment is required in inventory but company’s good sales & cadh

inflow, company is utilized its money 7-8 times in year.

7. Debtor Turnover Ratio:- This ratio indicates the speed at which the debtor are converted into cash. Debtor

Turnover Ratio of 6:1 is satisfactory. Ratio also indicate quality of debtor. Company’s

average age of debtor turnover ratio is satisfactory. On an average company is collecting

its debt less than 3 months.

8. Creditors Turnover Ratio:- This ratio indicates the speed at which the creditors are paid. The optimum ratio is

dependent on the credit period allowed by suppliers. Above statement shows that

company is not paying to suppliers in time.


4.8 WORKING CAPITAL ARRANGEMENT THROUGH

BANK

4.8.1 APPLICATIONApplication forms for WC finance from bank have not been standardize

except priority sector. Bank’s have application for credit facilities is required to be made

on the prescribed forms of the concern bank.

CADMACH applied for cash credit in Bank Of Baroda, Ashram road

branch.

Following details were submitted along with application.

Documents relating to the constitute of the applicant, status of concern documents

which gives information about the promoters and about the borrowing units.

Provided copies of Articles and Memorandom of Association with certificates of

incorporation and commencement of business.

Brief history of concern which covered its association with other and also gave

code.

Brief history of promoters, their experience, their other projects and statement of

assets and liabilities of promoters. And also furnished personal guarantee of

promoters.

For information regarding the borrowing u it, CADMACH had submitted

Balance Sheet and Profit & Loss account of the firm and also provide information

regarding estimated figure of the current year projected figure of the next year.

These all information CADMACH had submitted when first time applied

for cash credit. CADMACH applied for renewal. Company provides Balance Sheet and


Profit & Loss accounts which give information regarding past records as

well as estimated and projected figures. Quarterly statement also submit to bank if bank

ask for it.

4.8.2 FINANCIAL STATEMENTSThe financial statements are

(1) Balance Sheet

(2) Profit & Loss Accounts

4.8.3 CMA DATA BASE:-“Credit Monetary Arrangement” is administered by central data of

these forms to Reserve Bank is necessary for all references made for post sanction

security under CMA. In addition borrowers required to get cost audit under the

company’s Act, 1956.

All borrowers enjoy WC limit of Rs. 50 lacs. CADMACH WC

requirement is more than Rs. 50 lacs, so CADMACH has to fill prescribed form for

CMA.

4.8.4 JUSTIFICATION:-Borrowers submitted CMA data to the bank. After that Bank Scrutinize all

the forms and asked query to the company. Company may clarify points raised by

bankers. On satisfaction of banker he may carried over further process.

4.8.5 SANCTION LETTER:-On approval of concern authority sanction letter has provided to the

company with term and conditions.


4.9 BANK BORROWING

Bank constitute as institutional source of financing the working capital

requirements in India. Bank consider various aspects such as production and marketing

plans of the customer while determining the credit requirement. The amount so

determined by the bank is known as credit limit. Bankers are required to fix separate

credit limits for various type of credit facilities to be extended to various type of

borrowers. Margin are kept by the banker before granting finance. This is based on the

principle of conservation and is decided to ensure safety of funds.

TYPES OF BANK BORROWING:

Banks extended the following type of financial facilities to the customers:

1. Over Draft

2. Cash Credit

3. Purchase of Discounting of Bills

4. Demand Loans

Cadmach machinery Co.Pvt.Ltd.:

Using cash credit facilities through Bank of Baroda for its W.C. Company

had applied for the C.C. of 85 lacs and sanctioned by the bank in 1997-98 and has applied

for renewal of C.C. for 85 lacs for its W.C. Purpose.


4.10 SECURITY REQUIRED IN BANK FINANCE

Banks generally do not provide W.C. Finance without adequate securities.

The following are the modes of security which a bank may require.

(1) Hypothecation

(2) Pledge

(3) Mortgage

(4) Lien

Hypothecation:- Under this arrangement, the borrower is provided with W.C. Finance by the bank

against the security of movable property, generally inventories. The borrower does

transfer the property to the bank; he remains in the possession is a charge against

property made available for an amount of debt where neither hypothecation only to first

class customers with highest integrity. They do not usually grant hypothecation facilities

to new borrowers.

CADMACH’s inventory is hypothecated to Bank Of Baroda against

cash credit facility for working capital.


5. CONCLUSION

Cadmach combines its global expertise in identifying designing and building

customized tabletting and allied machines for injectables, Ointments & Liquids. More

than 85% of the tabletting equipments in today’s pharmaceutical companies in Indian

subcontinent bear the cadmach mark and exported to more than 25 countries worldwide.

By study it seems that current assets and current liabilities both are continuously

increased. Specifically in current assets, inventory is highly increased and in current

liabilities the amount of sundry creditors is also suppliers in time. Being an engineering

company and lengthy operating cycle, international competition, to keep ready spare

parts for maintenance. company’s credit policy etc. factors are influencing working

capital on bank cash credit sanctioned by Bank of Baroda.


6. BIBLIOGRAPHY

Company Website:

www.cadmach.com

Literature of the company.

Annual report of the company.

Financial Management by “Khan and Jain” Third Edition.

http://www.cadmach.com/


ANNEXURE

project

Documents

pharmaceutical facilities

indian pharmaceutical

indian machines

indias pharmaceutical

larger pharmaceutical

cadmach machinery

necessary machinery

installations of indian