Birla Institute of Technology & Science

Department of Management Studies

Pilani, Rajasthan - 333031

Write Up on “STANDARD FIREWORKS”

The saga of India's largest fireworks manufacturer, STANDARD FIREWORKS began in 1942 as a partnership firm and was converted into a private limited company in 1972. The company

Submitted to:

Dr. Monica Sharma

Submitted by:

Anandi Gupta

(2009H149210P)

traces its origin to a modest `safety-matches-making-shed' in Sivakasi. During its nascent years, the impetus to storm into the big league of pyrotechnic giants was sensed early by four towering pillars of the company; Mr. Rajaratnam, Mr. Chelladhurai, Mr.Sankaralingam and Mr.Arunachalam. Today, it’s one of India’s largest fireworks manufacturing companies producing around 450 different types of products, all of which are sold under the Peacock, Bell' and ‘Chavi' brands. It owns around 30 factories in and around Sivakasi, and has around 2000 dealers and 25 retail outlets across the country. Standard Firework’s provisional profit after tax (PAT) is Rs.99.26 million on net sales of Rs.0.99 billion in 2008-09. It also has operations in China. The company culture comprises of three values : Quality, Productivity and Integrity.

Spread, Size and Firsts

Standard Fireworks Ltd. products enjoy a 55% market-share in India and 5% of global exports. The company is currently growing at a steady rate of 10% every year. Spread over forty million square feet of prime land with several manufacturing and ancillary units, it employs over 10,000 personnel. The fact that only 10% of the total land area is being used, answers the concern for issues of environment and safety during production. 

Standard Fireworks has achieved the distinction of being the first Indian Company to break the monopoly of Chinese firecrackers in the US market, besides pioneering sales in countries such as U.K, Germany , Belgium , Holland , Spain , Canada , Middle East , South Africa and Sri Lanka. 

Manufacturing, Infrastructure and Facilities

Standard Fireworks has established in-house facilities for manufacturing every component in its entire product range. These also include; Raw materials, product design, packaging, printing, labeling, covers, cases, shells, raw material mixing, machining and storage . There is little mechanization and it mainly uses human labour. The facilities also include units for fuse making, wire cutting, extruding, manufacture of paper tubes, gunpowder, roll and dot caps. The ‘Research & Development' capability, combined with adherence to safety, legislation and quality standards has ensured that Standard Fireworks is a leading supplier to the explosives requirements of Military, Ordnance factories and public sectors in India.  

Standard Fireworks has the right combination of location, humidity and temperature, availability of raw materials, technology and labour to produce an amazing range of products that meet International standards. Owing to the risk involved in operations due to possibility of fire accidents company has focused its attention on safety details, while striving to achieve an `Accident-Free-Production Zone. Some of the regulations are: If the safe humidity level varies above or below 40 and 70 %, the work is immediately stopped. The walls in the factory are protected with Lightning barriers, sandbags or earth mounds.

The floors of working rooms are laid with 3mm thick rubber sheet to avoid friction.

To maintain the leading-edge manufacturing techniques, it has dedicated tremendous expertise and financial resources to research and development. Their printing studio creates their own label images and customizes design provided by their buyers.

Growth Profile and Diversification

Into its sixth decade of existence, the Company has performed brilliantly to earn the distinction of being the ‘Number One' Pyrotechnics Company in India and to be the World's largest in terms of the number of employees. Its phenomenal success is a result of sustained efforts in manufacturing and standardizing products. It has diversified into a varied range of businesses i.e. paper mills, packaging, granite quarrying, financing and Leasing, hotels & restaurants and educational institutions as well.  The Standard Fireworks Group runs an excellent Hotel chain, with a choice of Indian and Continental menus Trusts and Charities operate three Schools, a Women's College, an Engineering College and a Hospital. Standard Fireworks China Ltd was started as a joint venture between Liuyang Phoenix Fireworks Ltd and Standard Fireworks (P) Limited (India) mainly for export, technology & to make ‘Little Japan’ a global brand. It has established a strong reputation for providing innovative, quality products at an exceptional value.

Challenges and Recommendations

Globally, the fireworks industry is estimated to be around Rs 10,000 crore. The Chinese share is around Rs 3,000 crore, whereas India's share is very minuscule due to heavy government restrictions on imports & export. It costs just $1,600 to ship a container load of fireworks from China whereas it is $4,000 from India. The MRP is fixed taking into account the freight cost and the local taxes. There are regulations on product type- pollution & noise levels. The product is highly seasonal and the dealers and traders will have to hold the unsold stock Labour issues are also a concern as the firework factories are accused of child labour & low wages.

The company can expand its network of retail shops instead of the high margin seeking dealers to increase margins. It should ensure that issues related to child labour and labor wages are seriously dealt with to maintain their leading position in the ]fireworks industry.