Chapter - I

TNTRODUCTION

Forest is anatural resource which form the main body of the terrestrial ecological system.

It is acomplete natural resource base, a stock of asset, serving as sources of scarce inputs thal

can yieId utility tl~rough production or provision of goods and services. Natural resources are a

necessary ingredient of all economic activity. They can be of three types - non-renuevable I

reproducible and non-expendable. Forest fall under the second and third type. Forest can be

nah~rally or artificially re-established. Forest resource has certain special characteristics. One, it

is not possible to clearly distinguish or separate the forest capital and the products to be derived

t h e ~ f r o r n . There is, therefore, the likelihood of over-exploitation of forest: Ieadfng to h a ~ m f ~ ~ l

effects. And, two, forest have high level of externalities which are social benefits or costs, out

side the market mechanism.

The inter related and multiple rales of forests, covering the whole spectrum of

environmental conservation and rational utilisation of forest resource are vital for human weIfare

and sustainable socio economic development.

Forests can be defined as a plant association, predominantly of trees and other woody

vegetation (SacieLy of American Foresters, Forest terminology, Washington, 1 958, p9.34)

Considering their nature the value of the contribution of forest resources can be - Use values

IY li icl~ ~ I ~ C ~ L I ~ C dil-cct co111t-i bution in terms of goods and services and dil-ect,conti-rl7ution to soi I

I'm-rnation. water-shed conservation, recreation carbon sink capz~ci~y and water. yield ilu_rrncn~atiotl.

iVnn Llse values are of option value which covcl- the potential f~ttu1-e by lalei- ynei-~ltions or- hy

tl~cmsclvcs and existence value which i s the positive attihidc that people plncc on ari nssct 01-

~~cso~i~.ce independent of any use in the present 01- in the future, like ecological health.

Forel;( I-esour-ce PI-ovide considel-ible external I ties. They have many ecological ancl ;urnen i ~y

Functio~is such as safe-guarding andproductivity, maintaining water quality. facilir;~ti~~g ilsc11'

~u.;tainingl~-ncess of nutiient r-ccycling, positive intluence on clima~c and wether pattcms. consut-vinf

I>iological and land scape divelsity and supporting ovel-a1 l environmental stahi lity.

Conti-ihution of I~ I -es t can sener-ally be classified as goods and sel-vices. Goods arc

pl~vsici~l ohjculs overa wh icfi ownership IY ghts can bc cstahl ished. Services are 1101 sapal;ltc cnli lit,+

O \ I L ' I - wli i011 O W ~ I C F S ~ I ~ ~ i-igll~s can be established and they cannot be t~-ented sepal-illel y l'l-onl tlic k I.

sour-cu nf PI-oduclion. Forest goods arc tangible product and fill1 undel- two catcgol-ics - woncl

1~1-oc1ucls as timber-, indus~r-ial wood and fuel wood, and ilon wood products ~ 1 s gums, rexil~cs.

ci2ihIc producls. ~iaedicinal plant flavours, fragi-ances and so on. Services as bl-oadl y of 1ivo t y pu5

- envi~-o~~rnental and recreational. Benefi~s in the form of wood product are dc~.ivecl thl-ougli

clt~ti i~g down of trecs and can be obtained only once in the life cycle oFa [I-ee. Other benei'itc; r l~ i l t

is non-wood and service bcnefi t can be derived unintelm~p~ed as long as resources maintained.

The roresl dwellers of the different tri bal communities dcpend pri~narily on the mi nor

forest products fbr iheil-sustenance, while the forest based industries depend on ihc comme~-ciallv

valilablc ~vooci. Besides, to the forest dwellel-s of the tribal population forest is one of the mr~in

sources or sustenance. They coIlect food fri-orn the forest, use timber to constl-uct their- houses 01'

make different other types of irnpleme~its. collect fuel wood for cooking, and diffel-en1 o~her

o hjecls l'rom ~ h c forest 1-ec1uil-ecl by them for a variety of purpose.

T1ie foi-cst is a large area supporting not only contin~rous cover of tree but forms a complcx

assacia~ion of sh~uhs, plants andother forms of animals ctc. All of these do not occur accidently

but depe~lri on one another- for their existence. Forest has a major sole in the ovel-a11 ecological

partel-n o f II~~LII-e . They protect soi I against forces of erosion and provide home for distincr i ve

forriis of animal life. Forests are the results of many natural factors as well as ir~~poseci by

hrrrnaris, Clirnate is t l~c most important factor which has direct effect on plants ;u~d inciilrct cfFccr

on clevcloptnent of soil by weathering of parent material.

Nalural. ~csources determine the course of developlnent and constih~te the cl~allenge which

may or- lnay not be accepted by the human mind, Forest wealth conslit~rte an essential ingr-edient

ol'p1-ogi-ess, The contribution of trees to the healthy development of living beings is irnrne:tsin-able.

I11 alicient timc forests were considered sacred and sustained all life-Humans, Wild Life. BirAcls.

&ecs and Butterflies and the destnrction or forest meant death knell to the life ar.ounc1,

T11cr.e had been a wide recogni tion of the vital rolc that forests play in thc st~ugyle ~o sust:~i 11

the \~,oi-ld's gl-owing population. Since thc end of wor-ld war I1 there has been n wide spr-ci~d

recognitio~~ of the degree to which Inan has devastated the face of this earth, This had led lo

consi cterably i lnproved forestry practice in many countries and a serious I-eexamination o f

convcntiorial attitudes concerning rl-le use of for.ests by native people. Many of thc pl-ohlcm\ or

m[~Icl-n forest^-y particularly in tropical and sub tropical countries are related to rhe efl'ccts of

primitive peoplc's activities on the forest echo systems of the wor-Id. An area of rehabilitation of

clcz~.adcci forest land has been vitiated and forest conservation has achieved in thc pzrhlic

co~~sciousness [hat thcy have not 11ad p~cviously. Forests are increasingly regardecl as ;1 rcnue\rahlc

I-eso111-cu with mrr l tiple use, rather than as a single use resource. Therc is greater* acceplitncc of'

h e view that we1 l ~nanagccl forests on the periphery of great izrban areas have a very Iiizh socin

genetic value,

N:itural resources constitute a key factor in the cconomic develop~nent of a country. Thcy

arc potential wcalrh and if tllcy are fully exploiteci and properly utilised, economic developmcni

ol'a country can be accelerated. The connection between the econo~nic devcloplnent of a

country and its nahrral resources is an irnpol-tant factor in its economic growth. Forests constit~lte

one of our principal natural resources. They are essential in maintaining environmental stabilitv.

They provide raw materials to a number of important industries that contribute to the evol~ation of

sound national economics. Above a11 forests provide the poorer half of man kind with some of

[lie essentials fo1-survival, fuel for cooking, building rnateriaIs for shelter, fodder for their livestock

and protection for their food crops. The contribution of forestry to development can only be

fully realised, however, when forests are effectively managed. A social dimension must bc added

to the traditional production and protection orientations of forestry activities. Correct perception

of [he potential and benefits of forests is necessary to device the right frame for its development.

For this one has to begin with the elaboration of the picture of its cultural use and potential at

present. A better use and a Ixge potential of forests can be realised within the frame work of the

existiiig ownership pattern of forest.

The conservation and economic exploitation of the exhaustible resources and the fuller

ut i l isation of the I-enewabIe resources are essential for accelerating the economic growth of a

cou~ltl-y. Wood is needed for paper, pulp, newsprint, rayon, f~lrniture, matches etc. Wood for-

const~uction, plywood and other panels for furniture making, paper board for packing and paper

f a - printing and meeting all source of the basic commodities required in modern life. The industries

that manufacture these products form an important part of the world's industrial base. The

industries, which are mainly concerned with timber, are heavily concentrated in industrialized

cc~unt~-ies. I t 1x1s been einphasized that foicst~y represents long tertn invcstmen t possibly as[!-aciive

~ ~ c o I - ~ o I - ~ I ( ~ o T ~ s . gavc~-nmelits or othcr long l ived institutions, but not to the ind~\/iclual.

The exr~.acrion oilhe Sol.cst product is potenlially ecanoliiic opcration. Tdcally [he Ibr-ext I Y

given minirni~l subscqucnt care and clear-cut simple machines. F~-om singlc pacsay olicC 1f1e

grmtnil 1l1e har-ve<t begins \vitF-t thc sr~fely stored St-uits of se~ier-al years grmvth. T l~c ILJIIF ~ ~ t n

capacity of one-rorest lands to produce wood is lirnited. A litnit is set by competing use\ ol'

forch~s ;~!icP otllcr lands, space. ~'ecrention, falining rights, urban and su27u1-ban c2evelopment auncl

\o o n . 'r 'ii~ibe~ values are interpreted by the rnarkct p1acc even though thc timhcl- m;u.l;c~ 1s

\uh jcc~ 10 rnaiol- impcl-fcctions. Again rt very high dcgrec of uncertainty is attaclicd 11) all\.

csti~natc of filtul-e values as aguicle tocurrent prod~~ction decisions. The typical l'oresrl-y entcrpsixc

pi-oiluccs 11101-c than onc product. 121norig the major for-cst based ir~duslr-iec; are ~ ~ 1 1 1 ) ~ . papet:

nc\v,p~'iril. rayon, saw tnilling. wood panel products, rnatcl~cs, I-esiris anrt inediciiial 11c1.b~. Thew

~ ~ r o d u c ~ s and lb re~ t based industries play an irnpor-tanl I-ote in tlic lifc and ecorlomy o f thc .I)rc\i

I'olh who ;u-e col-nplelely dependerit on thctn. Foi.ests also play sorne part in cat-ning rhc foreign

cschange Tor 117e coun~ry. Thc main export irelnx 31-e teak. I-ose\vood. papcl- ilnd puperho:u'cl

crc. In ~~c lc l j t i on to thc bencfit to the coun~t-y of for-cign exchatige there is also t17c I.CVCIILIC 10 111~3

go\!crntncn1 in the form ofrayalty fi-om the bases of forest procluccs like barnbous or. wood IO

I'OI'CSI 1,acecl i r~c Ius~~- ies. Be.siclcs jl ;~lso pr-ovides employment. Thc use of irlcl~~s~[-ial wood i11

- . ~r-opics is far oul weighed by the use of firel wood by a factor of more than five. I huee clu;ir.tc~.i

of thc peopEc in deveIopiligcountry rely on wood for-coofting and heating. using tnore than 1500

miI1ioi-i cubic meters of wood each year. The extraction of woad for induslrial put-pose is an nually

iricl-easing by almost four percent for the world as a whole. But more than 80% of the wood stil!

conies 1'1-on? the developed countries. In contrast 80% of the wood pi-ociuced in thc rlcvcloprr~g

wor,ld is used L.S a source if energy. Sawn wood which is used jn constl-~rction, ru1.17il~u.e m a k i n ~

ancl packaging is the most comnion processed woocl product. The second largest category is

wood pulp. The third major industrial use is in the production of wood based panels incIuding

ply \vood, fibi-c board, particle board and veneer. FOI-cst PI-oducts other than wood, soit~ctirne\

I-cl'el-reil to as minor forcst products are extre~nely nun~el-ous and varied. They illclude IYhl.e\.

rubber, and resins, waxes, pha~rnaceutical and cosmetic products and ornamental pl:inls, Thc

comlnonly used stiuctu~-a1 limbers can be groupecl on the basis of their strenzth, ch;u*acter-istics

;ind thei1-1latura1 du~.abilily into several classes in terms of their suitability forsmnil (3 -6 ) medium

(6- 12) ancl large spans and for permallent and temporary stl-uctures.

There is a significant relation between forestry and rural deveIopment as about SO% of our

people live in I-ural areas. There is no doubt that development of forest can go a long way in

I-nising the levcl of living of the poor and vlllr~erable sections of thc countiy.

Of the various components of natural systems, forests and soil arc cruc~al in ecological

cecut-iry. Or tlic two fa-ests are afacet ofthe ecosystem vely muck intel-rered ~ h t h and su~ceptr t ~ l e

to r-apid clegr-adation. Forests have several uses or f~~nc t ions wllich often compete wi th each

other. FUI.~SLS are scarce and are becoming increasingly scarce in the face of pressure on them.

The xilualion apparently fits neatly with in the frame work of the economic pr-oblem.

Fol.cst\ have a modulatory rote in tempering local climate regulating the hydr-olngical cycle

ancl itgenerating and protecting soils, apart from many poorly understood t-olcs in at~nosphet-e

ancl bio~eocl~cii~ical cycles. This is in addition to mceting the requirement of a wide rmge of bio-

~-sso~.u.ces for- t I1e ~ural people such as fodder. S~~els small timberar-ld a l~ost of other. m:~tcl-iaIs for

daily use. They support many known and unknown ol.ga11islns and wild lire. Forests help in

rnaintai~iing a balanced environment. Among the interested parties there are 111e loc;~ls. that is.

those who live in for-est region and depend on the fut-esl for their. suslenance. Apal-! fi-orn fuel

wood, foddel-. raw ~nalerial like bainbao for artisans, and minor produce like lioncv, local i~sc or

Tc~.csts can take the Toim of clearance of forests either for shifting settled cultivation. Evcn if no1

clc:trecl f-br cultivatior~, for-esis support local agriculture by providing grecn 1nanul.e ~ I I C ~ Soclclel-,

pi-cvcnting soil erosion and maintaining gihound water i-echarge.

Co~nmct-cia1 and industrial interests o l the 1 argcr economy also find rhc ibres t 1.tssoi11-ces

i~zime~iscl y uscf~11. Hardwood 01- tinlbel- is needed for cons[^-uction, f~lrniturc, (he t a i 1 ways anti the

like, whilc softwood is required for paper and pulp mills and for packaging they try to dorninntc

the useof foi-ests both through influa~cing the government and through settIing tlieil- own agenls in

~ h c f c l i ~ s ~ regions. Their interests arise f ron~ and determine in the PI-occss of colnmer-cia1 isation 02'

thc forests, which is but apart of the transformation of both tl~eregional and the nalional econoiny

rroni a p~e-capitalist to arnarket o~lented mode of pl-ociilction. This process also involves inlegi-at ion

ol' the Ib~-cs~s with the larger national economy and f~indamental technical changes in low 1b1-est

r,csoul.ces arc treated and exploited.

The state or its concrete fonn - the government - is the third interested pa-ry in fe~.cst use.

Ptrsuma~l~ly, it i s interested in thc welfare of all citizen. Since promotingeco~~omic ~ r o w t h makes

available a large amount of resources to it with which it c;ui govern, and since such growth i s rllc;o

basic to imp-aving the levels of living of its people, the modern state is alwiys concerned about

m;lximizin? the rate of economic growth. But modem economic growth takes place througll

cnmmcrcialization and capitalist development, involving exploitation of natural I-esoul-ces and

integration ol'regional economies inlo the national economy.

The Government becomes one of the three main actors in the sLluggle $01- the use of fol-cst

~.chour-ccs. I-esponcling to pl-essures of other actors and aIso to technical chanses in he Iill-ger

econo~ny. The chal-acter of the state as we11 as its ideology regarding forest use and manage~nent

u ~ ~ d e l - ~ o a change horn time to time. The changes not only alter the conditions affectin2 tiic

dcmiu~ct For aricl supply of forest resom-ces, they also alter the relative status of di fferent iri~ercsr

~ I - E I U ~ S . Dcinancl in f~lhlre can be predicted taking in to accoutlt factors such as general econolnic c-

dcvclopment of the country, rate of anticipated industrial growth, li telxcy, ui-bani zalion, avxi la131 1 i ty

of a1 ternalivcs to wood a i d cultural traditions.

Thc forest product markets which have not received the attention of rcsearcliers so far,

niay have a great influence in shaping demand. To the extent markets integrate producers wil h

consulne~-s, they f'acili tale commodity production as producers allocate their resources on r hc

l~asis of signals they receive from markets. Thus thc clernand is cornm~~nicated to the producers

(and gatherers) through the medium of markets, and may have little ~~levance in a rnarkct cconorn y ,

I ~ i n n ~ - k c t conditions are changed, demand for the product will change, even if other- conditions

r c ~ ~ i n i n undisturbed. Thus demand and even supply is influenced by ~ h c nature of ~n;irkets, and

q~~~~n~i f i ca t ion of demand cannot be done in isolation to market factors.

The demand for wood is increasing day by day atid when the Government is proceeding

to pri valisc public sector undertakings, FIT, the only Government unit PI-oducing PUI-II~~LII-e and

joi~ier.ies need to be protected.

Pieview of literatwe

Several studies have bcen undertaken on the performance of public secloi- undertnkings.

S~udies have also been done on the forest management. When contribution of 11-ee.s to the

I-~cnlthy development or living beings is significant, studies relating to wood based inclustl-ies i~

meagre. An attempt is made here to present a brief review of such strrc-lies.

A s t ~ t d y ( 1 972) carried o ~ l t by theNatjclna1 Council of Education Research and TI-aininz

cnphasised that the optimal fi~nctioning of an economic system is depended upon the even matchtng

of zlle capability and efficiency level attained by its productive and clistributive system. The slucEv

also suggested that Ihc marketing war; pr-obably the Icast developed aypects of the Lndii111 economy

and h a t there has heen very little systematic attempt 20 study its probIe111 jn India.

This confinns with the observation of Dnrcker Peter. F. ( 1 978) that marketing was gen-

crally he most neglccred m+ea il l the economic lifc of developins countl-ic\.

The significance of marketing was brought out (1979) by Paul Horf~nan, foi-incr Admin-

istrator- of the United Nation Tndustrial Organisatio~i, as it was iIluso1-y to th ink that a coutit~-y

coulcI bc indusiialised by building factories - industrialjzation means building markets.

Peer Muhammed. S. ( 1 98 1) in his paper. ' The status oi'Government owned industries

in Kerala' stated that the policy objectivcsfor industrialization rnlrst be pesiodically r-cne\vecI and

wcII defined and the highest decision making layer at the Government level. must be 117odernizeci

l-t~aking it technically competent, efficient in evaluating performance and energetic in nclministrat-

ing cot-1.ectivc changes. He alsoemphasised than if a selective approach is no[ follo\vcd. our- toul

efforts in in dust^-y will continue to be distracted by the necessity to tend continuously a growing

sti~enm of sick industries.

Modi. K.N. ( 1981 ) former President FICCI, while discussing the possiF7ilities and pl-oh-

lems o['indusl~.iaI develop~nent in Kcrala, says, Kerara I~as vii*tually everything ncecled for rapid

i~-tdu~t~.inlisntion, ancl pleads the businessman to re-assess the industrial potentiality of Ker-a!a and

esplar-c possibililics of investing in the state. At the same time, Modi, urges that the Stare Go\/-

crn men1 tnusl on its part do some introspection and adopt a pragmatic approach lo the problems

and 11clp initia~c .

SIII~. 1ndil-a Gandhi ( I 982) late Prime Minister of India obsel-ved that "The ~ i ~ b l i c

qcctor can claim no virtue, unless it functions effectively as an instrument of producti on ancl

devclopmenl and as a creator of new wealth. The final test lies in profitability. scl-vice and growlh.

11'the puhl ic sccto~-cannot pass these tesls, then there is no meaning in it".

Pranab Mukbhc j ee , in his inaugural address at ihe sccond conference of Chief Execu-

tives of Public Enterprises held on 30lh May 1983 said "Sufficient return must cornc out of she

in\~est~ne~~t rn~tdc, surplus generation is essential for further growth and developmcnt".

Mrrn Mohar~ Sing11 ( 1986) in a Lecture on Planning and Markets held at Brzng:~lor-c

It~di:~~l lnstitutc of Science. stated thar "Aslage has been 17eached Illat unless rcsoul-cc gcnct.a~ion

cap:lhili!y of public entel-prises improves substantially, the development pi-ocess itself. will in

je017al-riy. He went on to warn thus, Indeed, if the present unsatisf;~ctory trencl in resout-cc gcn-

ei.;~lion pcrsis~s, the presence for p~.ivatisation is bound to grow".

111 an interview with Blitz. Vasanth Sathe ( 1 986) said "'An inefricient public sectot- ic; a

drain on public tcsoui-ces andultimately results in depriving the poor, because it is the prog-:lrni17cs

I'or thc pool- that are cititailedfor wan1 of lr~nds."

Mohilnan Pil1ai.P (199 1) in a paper Reforms i n Kerala's Industrial sector siticc

Iiheralisatio~i. stated that the new cconomic I-efor-rns in opel-ation sirlcc July 199 1 have L I S I ~ C I ; C C ~ :I

n c . ~ ~ phase in tlzc industrial deveIopmen t of the country and the responses of the state Govcrn-

men[ to thc nc\v phasc has not becn uniform.

Ravccndran. T.M. carried out a study (1 993) on the Socio Economic aspects of the

prohlems or timber and wood basccl ii~dustries in Malabai-. The sttlcly aimecl at locatins thc

pt.oblc~ns confi-onted in running the u n i ~ a n d came to a conclusiora that the gr.owth of woocl based

it1rIust1-ia! sectoi- i~ iinpeded by the decline of the forest land which is being canvetted for non

(LI~USI ~ ~ U I - ~ O S C S . 111~1s he prospect can be ensured only with the suppo1.l 01' I he Gavel-ntnen t and

I I I C pit bl ic in gcncl-al.

Sh:irma. K.C. ( 9 997) in a paper on Industrial Policy in India poinred out that tl~c i ~ ~ d u s -

r1.i;iP sector-was to play a key role in the achievement of the socioeconomic changcs anrl public

entel-171-ise was seen as harbinger of this transfarmarion.

Uclagalakshmi. V., (1 998) in a paper on forest resources management stated t hilt ad-

v:u~oed technological tools like Remote Sensing and Geographic Information Sensinp can call

fol.optiina1 and crficicnt management of forestresources.

AJaro~dra Prasnd. S. ( 1 998) in a paper revealed that ~ e o g a ~ h i c ~ n ~ o r m a r i o n Scnsrng

habi t a ~ changes which i s c~vcial for understanding dynamics of vegetation, assessment or ilnp;~cl

nn I11c changes on pillterns and process of the ecosystem and for evolving rational and sustain-

;11=1lc forcsr~-y policics.

Murali. K.S., ( 1993) in a paper suggested that any classificato~-y process of for-esr

vegctalio~~ shot~ld consider. the spalial dynamics of all the three Inyei-s namely. tree, shri~l-, and

11cr.b. The existing methods of classification of forest vegetation with I i ttlc information del-i ved

from other layer-s, so an attempt has been made to offer- an objective riletl~od of classiSyin~ rl~c

vczctalion using Geographic Infolmation Sensing.

Udaya1akshmi.V and Dutt C.B.S., (1999) carried out a stucly on tile Micro lcvel plan-

n i r y 311d sustainable rorcstsy progr;lrnmes implemented through micro level planning have been

gainitl; rnomentu~n showing a t1.ansition fipm tradilional rasest manageilient to peoplc's ~ ; I I - L I C ~ -

patory pr-ogl-arnincs, LO ensure perpetual supply of roresr produce i n mecting the growing cle-

mand of the local people, primarily for fuel, wood, and fodder, a careful planning is essential

Sarachchat~dra lele, Rajashekhar. G., VenkatararnaHegde. R. , Prevish Kumar: G. and

Silravana Kumas. P (1 998) in their study suggested that a micro scale inter disciplinary field

studies are therefore essential for lznderstanding the complex process leading to the social use

and mis use of forests.

Chnndra Choodan Nair. B. (2000) in his article pointed out that .wood is one of the

versatile materials which finds very wide application jn every day life. So key challenge to the

industry is to keep the sector responsive to the changing needs without any compromise on

environmen taI factors.

Gupta. S.K. (2001) stated that there has been a considei.able debate concerning the

definition of Forest and thcy have put forward a unified all encompassing defnition of forest.

On a thol-ough review of the available literature mentioned above it is noted that the

pc~formance of the Forest Industries Travancore Limited, a major public sector enterprise in the

state has not attracted the minds of the social scientists and hence the present study.

Statement of the Problem

The wood based industries may be divided in to large, medium and small on the basis of

size. Gwalior Rayons (Grasim Ltd.) and Western India Plywood Company Ltd. are the two

large sized units in the private sector and the Rindustan Newsprint Ltd., Kottayarn in the public

ec tnr . that utlise wood as the ~najoi- raw matel-ial. TI-avancol-e Plywood Indus~l-ies Llrl, ancl

Fo1.e\1 Industrics TI-avancor-e Ltd. are the othe~.major wood based industries apcratlng in ~ h c

slato. The sh~dy of all ~hese units 211-e outside the scope of the present shidy. Thc study concenl~.;itex

011 Itic Forest lnduslries Ti-avancore Ltcl. and their- larger socio-economic implications .Be in~ a

u11ique enret~rtse with exceptional raw material I-equii-ernen1 depending on the na~ural I-esoui-ccs

ol'lhe r(>rest of Kelxla the lnaiiagement of diffei-en1 functional areas Iikc ~nal-ltcting, pl-oduc[ion.

pot-son~icl and finance of Forest Industrics Travancor-e Ltd. is takcri for ;I critical evalualion in the

proposcd stuiiy.

Tlic p~crenl study was undel-taken on the background that no scientific study has so l':i~.

bccn 111;ide on thc working of Forest Industries Travanco1.e Limited, despite the fact t11a1 tlic

es~ahlishme~it ofthe company was a land~nark rn the history of forest industry in the 5!ate. Tht.

study Ibci~ses on thc working oTLhe company and its jrnpacl on the buying att~tudc ol'the cIllte~-cnl

ca~egnr-ies of consu~~~er-s of wooden f~lrnih~r-e like individuals, private entc~priscs, public cnlc~-p~-iscs

iuicl Gcrver.~ln~cnt Depar-tments.

Ol~~jectives of the study

The objectives of the present study are,

i l TEI ~Felci-mine the pel-fo~mance of Folcsl Industries Travancorc Lld. in elation to the

pr-ocu~-el~~enl of timber and the processing

i i ) - 7

l o ejxluatc the workins I-csults of the torpor-rition in relation to t t~c rnat~ngcn~en~ 01'1'~1ncl\.

i i i ) .. . lo asscss ~ h c ~alisfjction of variedca~egoriel; of consumer-s such as indi\~icluals. C;o\~cinrncr~~

Ilcpal-tmcrit. public cntel-pl-ises and psivatc entcr-priscs on the ~ I - E > ~ L I C [ S ol' ~:OI-CYI

Iradus~r.ies Travancorc Li tz~ited

Flypot hesis

In a~'clcr to stcam linc t t ~ c rnethociolosv for the s ~ i ~ d v the Trjllowing hvpott~csis wcrc

clc.\~cl~~pccl.

i 1 Incl-c:l.v.xl c o s ~ 01' limbct- 1c:tds lo inc1-casccl cost of pr~oduc~ion and this inrcr-n a~ivcr,xl\t

a Wccrs thtl pcr-f'o~-lna~~ce of Forcst 1nclust1-ics Travancni-c Lirni~erI.

ii i , I l igh c;~pil;il g~;rsi~lg 112s ~-c.sullc~l in low ~-etur.t? on invcslmcnt.

ill) 1)clav in 1nndc1-nisatio1-I hasunfiivourahly influenced the WOI-king ~sultsr~l'Fot-cst Inrlu<~~-tcs

* . I I ' ;~\ ';I~IcoI~~' Lin~iled.

i\lr.lhorlolog

D;ire elating to 1 1 1 ~ pcrforn~nnce of thc fit-cht Inrlus~rics Tr.avancor-e Lid. wcl-G collectctl

Iiolh ft.om primary and sccoi1da1.y sources, Primary data were cnI lec t~d [I-om two soul-scs-

consuiners ancl employees.

Consulmess of different iterns of furniture manufactured by the company ru-e located

lh I-oucphout thc strile. Consumers incl~rde individ~als, Govermnent dcpar-trnen~s, Private cn tcr-

171-iscs utld Public enletprises. However the company is mainly targeting Gover~iment of rice!, in

~ h c statc follo\ved by the other Lhree categol-ies. Such being the case. on the basis of a pilot study

can-ied out. Slratificd I-andom sampling was used for collection of PI-irnal-y data f ~ ~ m the con-

sutner-s. Data \vcrc cnllecred fr-om 700 Govel-t~rncnt officcs, 100 privatc cntetprisec. 100 puhlir

cntc~prises and 100 individuals from the No]-thcrn. Central and Southel-11 distr-icts of the sratc.

Data were also collecicd Tram 80 employees - Supet-visors - 15. Workers - 25

and Others - 40 associated with ~ h c Forest fncluslt-ies Travancorc Ltd. Thus 1 000 consumers

:tild 80 employees were Ihe sample Tot- the study.

Collection of Data

PI-imary datar-elating to the pc~fo~mance of the company in relation 10 the 171-ocu~~cment

u i ' i n ~ x ~ t ~ ~ and the praccssin~ were collected from the employees using a questionail-e Ibr t hu study

(Appcridix 1 ). Iri nrIdition to the pl-imary datacollectcd from thc employees. scconcla~-y dnt;~

col leotcct li-om ~ h c conlpany, Government publications and \~nrious pei~ioclicals and the ~.cpot.n%

i~lcrc used to dcterrnine rhe performance of rhc company,

In order. to a s s e ~ the satisfactio~~ of the consumers, PI-irnary data collected ft.orn con~;11111-

CI-5 wcl-e I-cliocl upon. The data fi-om the consumers were collected by using a prc-tel;icd intcr-

vic\u scli~~It11~ given in (Appcnclix - 11.) Consumers were interviewed in their taespccrlve ol'l'fces

tun([ I-csicient visits wci-e highly trsefil! in making persona1 absel-vatioi-1 and assessmen1 ol'thc

qu;llity. The I-csponses of the consumers were by and large e~icour-n_red.

H n ~ l u v e r a few workers ancl consumers wer-e reluctallt to ~Aespond freely in lhc 1n111:d

slngu and they co-operaled only after being convinced they would not be pel-sotir~ll~ iclctrzil'icd.

In addition to collecting responses of the consu~nei-s and c~nployecs discussions \ t c t ~

iicl(l \u i t l~ expct-1s i n the field and leadel-s of t.1-acle - unions.

Pel-ioci of Study

The stucly covers a period of 10 years con~rnencirzg From 199 1- 1992 to 2000-200 I .

1Howcvcr d a ~ a relared to the crnployees pertaining to the year- 2002 - 2003.

'rools I'or Analysis

111 01-clc~= to determine the perfor~nance of the company tools like a~~cl-ayes. ralioc; ;inrI

pclcenlages wer-e used through out the report. With a V~CIYII to rnexquring the level of sigrii I'ic:zrlcc.

chi-qclua~*e tesls were eml~loyecl.

Scope oi' the Stuclv

I t is linl~ci rhat. the findings of h e PI-men t study would bc usefill to plm11e1-s ;uld pol ICY tnnlic1.s

in forniulating k~ture progranimes for smoothenilig of theForest Industries in the public ,%~minrl~%tc. -

In a situation where thestate has been facingproblems relatedto mnnilig public seclorente~prises il is

felt that iliere is utmost need to stsengthen this indust~y as an eiuner of revenue.

Data related to the pe~formancc the company werc collected Trom the offrce rcco~(l\

end llierc was no ~iiechanism available forcounter verifying thereliability. It is against this situa-

tion that primary data. were collected from the employees for an in depth analysis. In m;lriy

cases responses were furnished by theemployees from their memories. This sort of a limitation

was again noticed on the responses ofthe consurnel-s in relation to their satisfaction on tllc

products of the company.

However in almost all cases, on the spot observation was helpful to make the data from

both thc sources more accurate.

The scheme of reporting is as shown below.

Chapter Onc - Introduction

ChaptcrTwo - Timber in Kerala - An Overview

Chapter Three - Forest Industries Travancore Lilnited -Financi;ll Slrucl~~re.

Cliaptcr Four - Operation of Forest Industries Travancore Li~nitecl

Cha~terFive - Marketing Management of Forest hd~istriesT~-avmco~e Limiletl

Chapter Six - S~lniniary of Co~iclusions and Recommendations