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PART-II ADVANCED CHEMICAL LIMITED

COMPANY PROFILE

ICI Plc of UK had a pharmaceutical business in Bangladesh. In 1992 the business was
sold to management and the name of the Company changed to Advanced Chemical
Industries (ACI) Limited. ACI inherited the rich ICI culture of product quality, customer
service and social responsibility and continues to nurture. ACI is the first company in
Bangladesh to obtain certification of ISO 9001 Quality Management System in 1995.
ACI is also the first Company in Bangladesh to get certification of ISO 14001
Environmental Management System in 2000. ACI employees are proud of their work
culture, business ethics and environmental consciousness. ACI values are embodied in its
vision and mission statements. ACI quality and environmental concerns are clearly stated
through declared policies.

ACI represents principals like AstraZeneca, UCB, Searle and Fujisawa in

Pharmaceuticals business; Colgate-Palmolive, Heinz & Dabur in Consumer Products
sector; Synzenta in Agrochemicals; Ranbaxy, Dabur, Wockhardt, Sanofi and Invesa in
Animal Health sector. The company maintains strategically located sales centers in
nineteen different locations across the country. It has developed an advanced distribution
system through its more than 300 skilled and trained manpower and a large fleet over
eighty vehicles. The distribution system is capable of handling continuing volume of
diverse range of products from the various businesses.

The company’s distribution centers are highly streamlined, computerized and automated.
We are capable of maintaining a cold chain for some specialized range of products such
as vaccines and insulin. The combination of this advanced function and multidimensional
capabilities made it possible to handle hundreds of products efficiently. ACI has three
separate manufacturing plants in the outskirts of Dhaka. The Pharmaceuticals plant is
located at Narayanganj; ACI Formulations has been setup at Gazipur and the Tetley
factory has been built at Konabari.

ACI Limited is the first company in Bangladesh to have attained the ISO 9001
certification for Quality Management System and ISO 14001 for Environmental
Management System. The Trading subsidiary has also received ISO 9002 certificate. At
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our manufacturing facilities, we follow cGMP guidelines and standards recommended by

World Health Organization (WHO) for pharmaceutical formulations.

ACI Limited Production and Sales Strategy Analysis:

It has been observed that depots of ACI Limited are selling finished goods both in cash
and credit. And at the end of each month, they prepare Monthly Stock Statement which
state the total sold quantities. For this reason, the Company can have the following
problems in future date:

 The finance department would be unable to trace out how much quantities are
sold on cash and how much on credit.
 Sometimes depots take the advantage of this by giving cash on delivery products
frequently as credit to the customers without payments.

Inefficient Stock Management of Depots:

The depots play a major role in selling and distributing Consumer Brands products. But it
has been observed that some depots are not maintaining effective sales management. The
reasons of their lack of capability of stock movement to distributors are as follows:

 No Sales Plan: It seems that some remote area depots like Maijdee, Sreemongol
etc are not developing a sales plan to help manage the sales team. They are just
only focused on distributors’ requirement, not motivated.

 Inefficient Workforce: It has been observed that there are some depots like
Rangpur, Maijdee etc who hire a worker without providing them with the level of
stock knowledge required to succeed.

 Sales Metrics: Depots maintains “Sales Metrics” that include number of

distributors, name of distributors, number of holding stocks and delivered etc that
overwhelm the sales staff with excessive tracking numbers.

 Lack of Sales Accountability: Regardless of the support and training, some

workers of depots are not properly stick to the commitment on Company’s policy.
It seems they have deficiency in targeting, frequency of contact and
communications with distributors.  

 Monthly Reporting:  According to Company’s policy, each depot has to submit

monthly stock information to the Finance Department. It is found that although
two separate reports are sent from each depot the quantities mentioned in each do
not match creating difficulty for the Finance Department to conclude the right
figures.
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 Less Sales Control: It has been observed that some depots are less focused on
sales. They have valuable skill set that quickly walk to the competitors rather than
the product profitability.

 Unrestrained Holding Stock: According to Company’s policy, the holding days

of stocks of products can not be exceeding more than three months. But it has
been noticed that there are some products like Dabur, Vatika, ACI Salt, Pure
Masala etc has low turnover and stocks remain in the depot for long time.

Saleable Capability of Depots:

The maximum saleable quantity depends on the capability and efficiency of depots. Each
depot is assigned to sale minimum 70,000 quantities of products to distributors’ within
two months. But it has been observed that some of the depots are not as efficient to sale
maximum quantities of products. According to the stock statement of January to March
2009, the saleable capability of depots can be categorized into three levels.-

 Maximum Saleable Capability

 Minimum Saleable Capability
 Lowest Saleable Capability

Management of Non Conforming Report:

ACI-FL and N.Gonj has a well-organized management of finished goods. They maintain
a seperate sheet of Non Conforming Report for obsolete products for following reason.-

 In future after refurbishment the products which recovered are send back again for
resale and final damaged products are remarked for the write-off purpose. Also it
is necessary to identify and differentiate between fresh stocks and  NCR stocks.

As there is no investigation of statement of sales return by finance department, the

Company do not specify the reasons of sales returned stocks. Also it is the major problem
in predicting the future stock quantities for higher customer satisfaction.

SWOT Analysis of ACI Limited

This SWOT Analysis of ACI Limited provides a strategic SWOT analysis of the
company's businesses and operations. This free SWOT analysis shows strengths,
weaknesses, opportunities and threats. This SWOT analysis of ACI Limited can provide a
competitive advantage.

Strengths

-reduced labor costs

-barriers of market entry
-high growth rate
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Weaknesses

-small business units

 
Opportunities

-income level is at a constant increase

-new markets
-growing demand
-growing economy
-new acquisitions
 
Threats

-increase in labor costs

-tax changes
-growing competition and lower profitability
 
Profitability
Outlook
Market

The industry shows a growth rate of about 7%.

Industry specific SWOT analysis (Relevance/Importance)

What happens in the underlying industry? Factors and trends affecting the overall
industry and their implications for this business:

Strengths

-The industry has unique products. (44%, 35%)

-The industry is more robust than the economy in general. (32%, 15%)
-Access to comparable industries is possible. (18%, 11%)
-The industry provides future trends. (11%, 42%)
 
Weaknesses

-There is a competitive market. (11%, 24%)

-There might be too less suppliers. (51%, 53%)
-We see long adjustment periods in this industry. (49%, 11%)
 
Opportunities
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-New products and services are possible. (55%, 38%)

-Global markets are available. (11%, 52%)
-New trade agreements between countries are possible. (40%, 40%)
-New trends can increase market size. (29%, 30%)
-The market changes fast. (23%, 50%)
 
Threats

-Increasing costs might be possible. (33%, 31%)

-Economic barriers can be seen. (49%, 50%)
-Automation is an unknown factor for this industry. (26%, 17%)
 

Financial and Strategic SWOT Analysis provides a comprehensive insight into the
company’s history, corporate strategy, business and financial structure, management and
operations. The report contains a detailed SWOT analysis, information on the company’s
products and services, key competitors, as well as detailed financial information.

PEST Analysis of ACI.Ltd

PEST is an acronym for Political, Economic, Social and Technological. This analysis is
used to assess these four external factors in relation to your business situation.

Basically, a PEST analysis helps you determine how these factors will affect the
performance and activities of your business in the long-term. It is often used in
collaboration with other analytical business tools like the SWOT analysis to give a clear
understanding of a situation and related internal and external factors.

Political Factor of ACI.LTD

Politics can increase ACI limited food risk factors. Because government can change
business rules that negatively affect ACI limited food business.

ACI  is committed to maintain the harmonious  balance of our eco-system and therefore
constantly seeks ways to manufacture and produce products in an eco-friendly manner so
that the balance of nature remains undisturbed and the environment remains sustainable.
In pursuit of this goal, ACI will
 Comply fully with all local and national environmental regulations.
 Conserve natural resources like water and energy for sustainable development,
and adopt environmentally safe processes.
 Ensure appropriate treatment of all effluents prior to discharge, to prevent
pollution or degradation of environment.
 Ensure appropriate communication and cooperate with internal and external
interested parties on environmental issues.
 Create awareness on environmental issues among our employees and suppliers.
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 Adopt modern waste management technology.

Economic Factor of ACI.LTD

Life Cycle of stock inflow and outflow of ACI Limited:

It has been observed, efficient stock management depends on inflow and outflow of
stocks of products that enable the company to forecast stocks of products for future
needs. Also it helps to predict investment opportunities or future stock deficiencies by
providing information in making critical business decisions. The system of the stocks
inflow and outflow of ACI Limited can be designed into the following ways:

Social Factor of ACI.LTD

ACI's guiding principle in all its operations is to be a 'responsible corporate citizen'. Thus,
Social Responsibility is a top priority for every individual at ACI. Our endeavors toward
discharging our social responsibilities have become more focused since our adoption of
the principles of the Global Compact.
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Initiatives that have shown significant contribution to societal development are

Continued Medical Education (CME) for medical professionals and Children's
Education Programs.

A dedicated team of medical graduates makes up the Medical Services Department

(MSD) in ACI, which carries out CME programs termed 'Clinical Meetings' all across
Bangladesh. These are essentially non-advertised meets of medical professionals that
serve as a training and knowledge-sharing forum, often conducted by experts on the
subject. Our partners in development for these programs are doctors, medical associations
and/or departments, and various study groups. The level of involvement of ACI in these
programs may range from only sponsoring the entire program to providing all types of
services and technical support to the presenter to even conducting the program by an
MSD doctor. Support from MSD include research support for deliberations at the meet,
literature and multimedia presentation for the program, updates on new technology and
thoughts in medical fields, and even educational support to any participant in their area of
interest.

ACI has also undertaken an English Education program in Faridpur, one of the remotest
districts of Bangladesh. This provides support to teach English Language to school going
children.

Outcome

Doctors in Bangladesh who are not living in the metropolitan cities have very limited
access to the Internet or any other sources of information. In order to keep them updated
on the developments in the medical practices regularly, the CME program has been
proven highly effective.
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ACI believes that by promoting education of children, we are contributing to societal

development by shaping the minds of our future leaders.

Technological Factor of ACI.LTD

It has been viewed that to keep track of all the sales invoice, the finance department use a
Software named “Sales and Depots Management Software (SDMS)”. The benefits of
using this software are as follows:

 It helps in keep tracking of all Invoices for proper sales.

  The department can easily sort out the sales management of depots.
 It improves the efficiency by saving time and money

The workout of SDMS Software is shown below:

But it seems that SDMS has a limitations tat it does not indicate the overall stock position
of products in each depot.

Suggestions:

Efficient Management of Non-conforming products: To specify the reasons of sales

returned stocks as detected at Konabari and other factories, the manufactures should run
investigation and evaluation procedures on the defected stocks. This will help the
Company to identify the error in both production and warehouses.
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Management of Stock of Cash and Credit Sales:

To analysis the actual sold quantities, the depots should prepare separate sheet for cash
and credit sales.

Conclusion:

Bangladesh is a country of immense opportunities. With a huge population density and

only 22% penetration rate, there is a big untapped market waiting to be discovered. ACI
Limited is the biggest market player in the manufacturing industry and should think about
these opportunities for retaining the market leader position.

Proper Stock Management of ACI Limited is needed to identify both cost and revenue.
And after identification of cost and revenue, profit can be recognized. The Stock
Management of Consumer Brands of ACI Limited is pioneering in introducing and
implementing various modern financial statements like Monthly Stock Report, Refurbish
Statement, Non- Conforming Report, Stock Reconciliation etc. Though they manage
stocks in a systematic ways, but they need more automation in this management.

The Stock management function not only compiles and coordinates the company plan of
the conglomerate but also instrumental in feeding the Local Market of the country as well
as world in large. The Consumer Brands area is one of the most exciting areas in ACI
Limited. But Company should think about incorporating more facilities, inventing newer
services and increasing effectiveness and efficiency in Stock Management system. Only
then it can remain in the position it is in now.
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PART-IV

REFERENCE

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