FUNCTIONAL AND OPERATIONAL IMPLEMENTATION AT KRIBHCO

Krishak Bharati Cooperative Ltd. (KRIBHCO) is a cooperative society set up for

fertiliser manufacturing, registered under the Multi-State Cooperative Societies Act
(MSCS), 2002. It was promoted by the Government of India, IFFCO, National
Cooperative Development Corporation (NCDC) and other agricultural cooperative
societies spread all over the country. Since 2013, it has no government equity participation
either by the central government or any state government in India as KRIBHCO has
repatriated share capital to the government.
Krishak Bharati Cooperative Ltd. basically operates in the business areas of
nitrogenous and bio- fertilisers and seeds. Its fertiliser complex is located at Hazira
near Surat in Gujarat, seed plants at various locations in India, and service centres called
Krishak Bharti Seva Kendras (KBSKs) at various places in the country. It has equity
participation in fertiliser companies within India and in one company in Oman. It has
diversified into the power sector through investment in Gujarat State Energy Generation
(GSEG). The infrastructure was set up to enter into logistics business that was forward
integration aimed at warehousing and container train operations for fertiliser
transportation. Besides it has equity participation in various ventures. One line of its
business is to import decontrolled fertilisers into the country. The cooperative is
managed by a board of directors, senior management headed by a managing director
(MD), and functional heads in the areas of operations, finance, marketing, and vigilance

The vision of KRIBHCO is stated as: ‘To become a world class organization that
represents the farmer community and maximizes their returns through specialization in
agricultural inputs, rural need-based products and other diversified businesses that
maximize stakeholders’ value.’ The mission is ‘to act as a catalyst to agricultural and
rural development by selecting, financing and managing projects that are both socially
desirable and commercially profitable.’ There are a range of objectives including
making optimum use of its fixed assets, increasing capacity and mar- ket share, social
objectives to educate, and train and support farmers, transferring technology for modern
farming and strengthen the cooperative system. It also aims to diversify into other related
business areas such as rural retail, infrastructure, and logistics. Strategies adopted are
expansion of capacity and diversification into related lines of business.
The equity capital has been subscribed by about 9,500 cooperative societies. Its net
worth is Rs. 3,184 crore constituting equity of Rs. 390 crore and reserves of Rs. 2794
crore. It earned a post-tax profit of Rs. 122 crore in 2013–14 and has been declaring a
maxi- mum permissible dividend of 20 per cent for the last 10 years. Krishak Bharati
Cooperative Ltd. has its central marketing office at NOIDA and markets its fertilisers
through an extensive marketing network spread over 17 states of India through
cooperative and institutional agencies and through its own outlets. The cooperative
agencies in its marketing network are located at different levels such as apex, district and
taluka levels, and village-level societies. The institutional agencies typically involved
are the agro-industries corporations and land reclamation agencies. It has in-house sales
outlets called the KBSKs. The cooperative offers a direct help line to farmers and advice
through KRIB- HCO Krishi Paramarsh Kendra. KRIBHCO prepares marketing business
plans to guide its’ marketing and sales activities. A marketing sub-committee is appointed
by the board of directors to oversee the marketing functions as elaborated it the bye-laws
of the Society. Future plans include introduction of new products such as water-soluble
fertilisers and zinc sulphate.
Manufacturing at KRIBHCO takes places at its fertiliser complex at main Hazira plant
in Gujarat and at its other manufacturing and seed-processing locations throughout India
where production of urea, ammonia, bio-fertilisers, seeds, and liquid argon gas takes
place. It is an ISO-9001: 2008, ISO-14001, and ISO 18000 certified company. Various
functions of bagging, handling, and loading in product handling plant are performed
through manual product handling process as well as through mechanised bagging
machines. Mechanical improvements have also been affected for smooth transfer and
conveying of bags in the bagging plant. These efforts have resulted in minimising
product loss, avoiding shortfall or excess in loading quantities, minimising the loading
time, and reducing the specific bag consumption.
The management information system at KRIBHCO covers it internal operations and
the marketing network. The central data centre is located at its corporate office at
NOIDA. It provides servers and ERP application services. Webased software inter- face
has been developed and implemented to integrate with SAP ERP. Access is available to
marketing field officers for sales and inventory management. Management dashboards are
available to functional directors to monitor their areas through business intelligence
tools. Performance management system is available for work improvement and
personnel needs. Computer-mediated communication such as video conferencing is used
to maintain communication channel between corporate office and plants. Vigilance is
considered important at KRIBHCO on par with other functional areas aimed at
preventive as well as punitive vigilance and ensuring transparency and accountability. The
vigilance department works for systems improvement and simplification and
codification of rules and procedures for the smooth functioning of the Society. There is
a chief vigilance officer (CVO) at the head office and vigilance officers at plant and zone
levels. There is a three-pronged vigilance policy in place aimed at creating awareness,
pre- vent unethical activities, and punish misdemeanours. The board of directors
oversees vigilance through 6-monthly reviews. An internal enquiry is instituted to
investigate allegations against the erring cooperative officials.
Krishak Bharati Cooperative Ltd. has formal policies in the area of energy, environment,
quality, and safety. It has declared its energy policy and volunteered its commitment
towards energy conservation. The energy policy is aimed at optimum utilisation of
various forms of energy in a cost-effective manner to conserve energy resources. The
Cooperative has set up quality policy and environment policy, which have been framed
integrating the energy saving objectives and goals as well. The safety policy of the
Cooperative emphasises on the importance of safety and to adherence to safe practices.
A safety department performs the functions of ensuring compliance with safety standards
Krishak Bharati Cooperative Ltd. has a modest HR development set-up where it
arranges in-house training and sponsors employees to external training programmes. The
personnel and administration department looks after the other HRM functions like
recruitment and selection and performance appraisal. The Cooperative had to undergo a
decade-long struggle to wrest control from the government by repatriating shares. This
places great responsibility on KRIBHCO management for its expansion and
diversification plans and other major business decisions such as dividend declarations
to its constituent cooperative societies. It also opened up possibilities for more strategic
decisions such as revival of Urvarak Videsh Ltd. (UVL)—a joint venture with Rashtriya
Chemicals and Fertilizers (RCF) and National Fertilizers—formed in 2009 to acquire
raw material stakes overseas and revive sick fertiliser plants in the country. There are also
possibilities such as the one KRIBHCO has with Reliance Communications
Infrastructure to use its rural marketing access to provide communications services.
KRIBHCO, despite its primacy on vigilance has not been free of controversies. A Central
Bureau of Investigation (CBI) enquiry was instituted involving relatives of finance
ministry official and a KRIBHCO board member who allegedly were faciltating a joint
venture between a Norwegian fertiliser company and KRIBHCO. Another major
challenge for KRIBHCO being a processing organisation is environmental protection.
There have been instances of its plants being shut down due to gas leakages and
environmental pollution.

Questions
1. Keeping in view the status of KRIBHCO as an organisation in the
cooperative sector, evaluate and comment on the adequacy of the
functional policies in the light of what you have studied in this chapter.
2. Suggest directions for KRIBHCO’s top management regarding
functional policies in view of its ambitious future plans
3. Enumerate the steps that KRIBHCO could take for maintaining and
improving its operational effectiveness in terms of productivity,
processes, people and pace.