DECCAN PIGMENTS AND PAINTS LIMITED (DPPL): STEERING ... · Pigments and Paints Limited (DPPL), was busy giving a final touch to the next Three-Year Strategic Plan for 2018-20, for

Parikalpana - KIIT Journal of Management210

Case

DECCAN PIGMENTS AND PAINTS LIMITED (DPPL):STEERING THROUGH VOLATILE MARKETS FOR

SUSTAINABILITY

Dr. A V Ramana AcharyuluProfessor, Indus Business Academy, Bangalore [email protected]

Vaishali AgarwalAssociate Professor, Indus Business Academy, Bangalore [email protected]

Himanshu PandeyAsst Manager, Mother Dairy, Amaravathi, [email protected]

DoI: 10.23862/kiit-parikalpana/2019/v15/i1-2/190182

Abstract:

DPPL, a public sector enterprise operating globally, involved in mining, processingand marketing of heavy metals like Zircon and Titanium Dioxide, is facing multi-dimensional challenges in its internal organisational matters and in externalenvironment, facing volatile scenarios of competition from global markets andindustry. The Managing Director is saddle with the task of crafting and f ine tuningthe competitive strategy to build the organisation as a pro-people, pro-customerentity that sustains its market presence over global volatilities of markets, industry,technology and customer needs for these products.

Case is developed to help orient the students with volatility of industrial productsand markets that are b2b and help build elements of a pro-people organisationthat addresses all stakeholders of the company. Especially, the case attempts:

-to understand and appreciate VUCA scenarios in global businesses

-to conduct and analyse external and internal environment appraisals to map thedynamics of heavy metals industry and paints and pigments business.

-to build sensitivity to the issues of society and environment while involved inmining and metal processing industry

-to map the global market dynamics and build a high level of responsiveness as acore competence to compete in global markets and global competitors.

Key words: Strategy, VUCA, Global Strategy

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Opening:

Anand Rao, Managing Director, DeccanPigments and Paints Limited (DPPL),was busy giving a f inal touch to the nextThree-Year Strategic Plan for 2018-20,for the approval of the Board ofDirectors. It was a sultry afternoon ofJune 2017, and the scenarios in whichDPPL has to steer through in the comingperiods were adding to the heat,humidity and discomfort. The prospectsfor Titanium Dioxide appear to bechallenging, in terms of globalproduction and consumption trendsand price f luctuations. While hiscompany has built a portfolio of highlysought after minerals from the sands ofMalabar beaches, a time has come whenhe has to take a f irm call about how tohandle the Titanium Dioxide businessof the company; how to shield hiscompany from the market fluctuationsand how best to steer clear of theenvironmental pollution andsustainability challenges in the miningand processing operations.

Rao called for scheduling a meeting,asking for a brain-storming session onoperations and marketing and industryscenarios, and requested all the seniormanagers of the company to join,especially, GM - Operations and his teamin mining and processing departments,Senior Managers Marketing, Operationsand Finance and GM - Administration,and the Management Trainee who wasworking under MD, for the past fewmonths, to study DPPL marketing andbusiness operations in the last threemonths. Krishna Joshi, working as asummer intern with Rao, just submitted

a brief report of a gist of his studyfindings. Krishna completed his f irstyear MBA from a top B School of thecountry, interning at DPPL for the lastthree months, studied the organisation,its business, and market inquisitivelyand assessed the distribution networkof the company. Rao was hoping thatthe internship report and itspresentation would lead to betterunderstanding of the global anddomestic industry and help him shapethe three year plan.

Rao prides himself to be part of a highlyaggressive and successful company,despite it being a state level public sectorenterprise and he is one of the fewexperienced marketers in this nicheindustry, working with DPPL during thelast two decades, in reaching to thisposition and building its marketposition to a very strong and formidablelevel. He nurtures the dream of makingDPPL a globally reckoned player in theminerals and metals sector andaggressively works to building upcompetitive space for his f irm indeveloping and controlling the markets.Even as all invited joined the meetingand Krishna commenced hispresentation, Rao was reminiscing thegrowth story of DPPL and the challengesit faced, and is continuing to face.

Titanium Dioxide Industry andIndian Beaches

The long coastal line of India, withpristine beaches and white and goldensands is a cynosure of travellers fromacross the globe and one f inds summersfully patronised by global tourists inthese beaches across the length of east

Deccan Pigments and Paints Limited: Steering through volatile markets for sustainability


and west coasts. While it be so, thesebeaches are also attractive to both Indianand foreign entrepreneurs, who wouldlike to turn the raw minerals into realgold, so to say! Coming to the presentcase, Indian sea-coast holds abundantreserves of two minerals - Illeminite andRutile, across the long line of Indianbeaches, are expected to be more than60 million tonnes. The beaches ofMaharashtra, Kerala, Odisha andTamilnadu are rich in these minerals,with some estimates that Kerala aloneaccounts for around 45 million tonnesreserves and Odisha for another 5-10million tonnes of these minerals.

Illeminite and Rutile are highly valuableraw material sources in the manufactureof Titanium Dioxide (TiO2) pigmentmanufacture. TiO2 is the ingredientgiving colour in many industrialproducts such as paints, rubber, plasticand printing inks etc. The partlyrestrictive industrial policy of Indiadoesn’t offer much access to globalcompanies to access these mineralresources, however, allows to competewith local companies in supplying TiO2as a raw material to industries involvedin manufacture of paints, inks etc. Thus,the domestic companies which have anaccess to the mining of these mineralsexpect to have a competitive advantageagainst the foreign TiO2 suppliers.Abundant natural resources across thecountry also augurs well for continuedlong term growth story for a f irm thatcan harvest the advantages of easyaccess, open mining and low cost beachsands in playing a dominating role inindustrial markets across the globe.

Early years of DPPL

Acknowledging TiO2 as a sustainablenatural resource based industry, avisionary entrepreneur startedharnessing the beach sands of Keralaway back in 1932. The f irst full-fledgedmineral separation plant in Chavara,Kerala was established by M/s Pereiraand Sons (Travancore) Pvt. Ltd., whowere involved in mining and separatingmineral sands into various constituentslike Illeminite, Monazite, Rutile, Zircon,Leucoxene etc. In 1956 this concern wastaken over by the state government ofKerala and was run under the control ofindustries department, for the nextf ifteen years and in 1972, it wasconverted into a fully owned stateenterprise, in the name of DeccanPigments and Paints Limited (DPPL),managed by Government of Kerala.

Till 1974, it continued its operations withjust one Mineral Separation Plant; in1974, it received a letter of intent to setup a manufacturing plant for theproduction of Titanium dioxide (Ti02)pigment using Chloride process. It soonobtained a license too, in the pre-liberalised India, as it happened to be apublic sector enterprise, to set up its full-f ledged mineral processing plant torecover Titanium Dioxide and few otherindustrial grade purif ied minerals.However, the construction andcommissioning of the plant took a longtime and after several delays, the plantwas commissioned in December 1984,with which DPPL became the f irst andonly Integrated Titanium dioxide plantin the world.

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Thereafter, for several years, DPPLstruggled to run the business f in aprof itable way, and ran into losses till1991. In 1991, DPPL realised the need toaddress the losses and the need toturnaround, as the company realisedthat it has core strengths and advantagesthat no other f irm in this industry candream of. The realization that it canestablish itself as a market leader servingthe TiO2 due to the vertical integrationit created for raw material sourcing,processing and offer industry relevantand highly sought after products, leadto the company gearing up for turn-around. DPPL worked on turn-aroundstrategies, with the commitmentstarting from top managementpercolating down to the lowest cadre ofworkers, during 1991-1993. TheCompany reached the breakeven levelby 1993. From 1993-1994 onwards, thecompany started to make prof its andwiped out the entire accumulated losswithin a few years and repaid the longterm loans. Thereafter, it did not lookback from its story of success andgrowth.

DPPL in 21st Century

DPPL is located at Sankaramangalamnear Chavara, Kollam, and a coastaltown 85 km north of Thiruvanantha-puram. DPPL is situated on the side ofNH-47 with around 285 acres for itsfactory and various activities.. DPPL hasworked to grow to a worldwidereputation as a successful, profitable andsocially responsible company with aneco-friendly image between 1994 and2017. The company derived strengthfrom its dedicated manpower and

customer organization. About 2000employees are in the rolls of thecompany.

The DPPL has established itself as amodern, progressive and state of the arttechnology holder in TDO industry, byway of a series of technicalcollaborations with M/s. Kers GeeChemical Corporation of USA; M/s.Belight Corporation of America; and M/s. Wood Dunkham of UK, to handle theraw materials and produce TDO usingChloride based production process.DPPL is certified by various certificationauthorities for testing, inspection andcalibration services, good qualitymanagement system, environmentalmanagement system and occupationalhealth and safety (OH&S) managementsystem. The manufacturing processesfollowed by DPPL for two of its keyproducts is detailed in Diagrams No. 1and 2. DPPL pursued global levelcertif ication standards andaccomplished setting them in anexemplary way over the years. They aredetailed in exhibit 8. As a result, DPPL’smanagement was acknowledged byvarious bodies and DPPL receivedseveral awards for its manufacturing,quality and environmental standards, aslisted in exhibit 9.

Titanium Dioxide and itssignif icance in global industrialmarkets

TDO is an effective ingredient of paints.It increases the opacity of paint andimproves the gloss and finishing qualityof the paint. Almost 30% of the cost ofmanufacture of a paint is accounted byTDO. Apart from paint industry, it is



extensively used in ceramics, tiles,designer outdoor f ixtures, plastic,cosmetics and paper industry. So,wherever there is colour, TDO pigmenthas a role to play. Its ability to screen UVrays makes it useful in sunscreen lotionsalso. The history of commercial graderutile TDO pigment dates back to 1951when it was f irst launched in market asa far superior alternative to pigments likewhite lead for paint industry. It is veryinteresting to note that companies suchas Du Pont in USA and Europe wentahead with processing of sands for TDO,around the same time when M/s Pereiraand Sons (Travancore) Pvt. Ltd waspioneering manufacture and sale ofTDO through indigenous ways to thelocal and European industry. Since thenthe growth saga of DPPL was neck-to-neck with Du Ponts, and others, in termsof upgrading to newer technologies andprocessing methods, by 1991, whenChloride based TDO manufacturingbecame most sought after by theindustry, DPPL was already leading insupplying large quantities of the sameto Indian and International clients.From the times when the demand forTDO was a small 100,000 MT globallyin 1950s, to the present global industryconsumption has reached about 5.5million tons with a market value ofaround $15 billion by 2020-22.

The other products of this companyinclude various minerals extracted fromthe sand, such as titanium dioxidesponge – a product used and completelybought by Bharat Space ResearchOrganisation (BSRO); and few otherproducts which are produced as

intermediaries during the production oftitanium dioxide. A list of all mineralsand products made by DPPL is given inExhibit 1. The company planned to reacha production level of 100,000 MT by early21st century, so as to establish as a majorsupplier, however for various reasons,the company maintained the productioncapacities at the initially establishedlevels of 40,000 MT till date. Rao is stillnot very sure whether to pursue capacityexpansion in the current globalscenarios.

The Market

The demand for titanium dioxidepigments in India is around 200,000 MT,of which 60,000 MT is met by domesticplayers and the rest is fulf illed byinternational players. DPPL has a shareof about 28000 MT in domestic marketin the year 2013-14, and also registered12,000 MT international sales. DPPLaccounts for a market share of about fiftypercent of domestic players and catersto around 15% of the total domesticdemand.

The global demand for TiO2 is around5.5 million tons valued at around $15billion, with two of the US companiesaccounting for almost f ifty percent ofmarket. China has the dubiousdistinction of world’s largest consumerfor several decades, using almost 70% ofthe global production, and was veryshrewd to tap the business opportunitywhen west went into repeated cycles ofrecession, and thus refraining fromadding capacities to, and set up severalproduction units and encouraged jointventures to become not only the

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cheapest but a signif icant volumesupplier of TiO2 disrupting the globalsupply chains and markets. Today,Chinese players account for 10- 30% ofthe global supplies. However, industrydata is highly contradicting, with nofirm understanding of who controls thedemand and supply globally. TitaniumDioxide Manufacturers Association,majorly representing American,European and Pacif ic producers, offersmixed interpretation of the impact ofChinese players and supplies.

Competitive Scenario:

DPPL is witnessing chequered sales bothin domestic and international markets.In the last couple of years thecompetition level has raised to a verysignif icant level and the outcome of thishas resulted in shrinking market sharefor DPPL. At present there are betterproducts available in the market,produced by international players likeChemour, DuPont, Crystal and Tronox.A large number of Chinese players,working with small quantities each,have turned the competition even moreintense.

TiO2 and Global market scenario

The list of international players, whooperate both Chloride basedtechnologies as well as othertechnologies in making TDO are: Dupont (USA) Chemours (USA) Huntsman (USA) Ishihara (Japan) Hoitex (USA) Millennium (Germany)

Henduk (Seoul, Korea) Flectha Titanium Products (New

Zealand) Tofins (Netherlands) Crystal (Multi-country) Tronox (Multi-country)

Competition aggressively pursuesdifferentiation strategies based on theTiO2 production processes; based onapplication purposes and based on coreTiO2 product characteristics bundledwith production process. Deriving TDOis done using either sulphate process orchloride process and chloride processis touted to be the cleanest and sulphateprocess the dirtiest, with the thirdprocess being evolved as a mid-way interms of cost of production as well asextent of pollution it leads to, isincreasingly attempted by companies,but with unique adaptations by eachcompany to suit its supply chain.

The demand for TiO2 pigment is presentaround the globe but as a country, Chinahas surpassed all other countries interms of consumption. Almost quarterof the entire world’s demand is used tofulf il the rapid growth of Chineseeconomy. Europe consumes over 30% ofthe total demand, while Asian countriescommand 19% of the TDO consumptionand rest in the American continent.

The TDO pigment industry haswitnessed surge in the demand over thelast two decades after India’s economicreforms during 1991-92, with rapidgrowth witnessed in infrastructuredevelopment, real estate sector and



lifestyle spending. Paint industry isleading consumer of TiO2 pigment witharound 75% of the total consumption,followed by plastics, ink and paperindustry. The consumption of chloridebased pigment is on lower side ascompared to sulphate based in spite ofbetter properties, due to the cost andprice it commands. The Chinese marketused to specialize in the cheapersulphate route pigment till 2014, andsuddenly transformed itself as a majorplayer in other two process based TDOtoo, thus giving TDO at all price pointsto its buyers. Today around 70% of localdemand is met by importing thepigment with a majority volume comingfrom China. International players likeChemours, Huntsman are expanding bypartnering with distribution f irms inIndia. The production capacity of f irmsaround the world today is way more thanthe demand. This scenario is keeping theprices below the level of year 2012 whenit reached its peak, even at the end of2016.

Domestic Market of TDO:

The major domestic f irms in Titaniumdioxide market are:

TTP Ltd , Trivandrum

Kimburn Chemicals, Chennai

Konark Chemicals, Kolkata

These f irms are producing the rutilebased Titanium dioxide which are ofdifferent variety having differentproperties and uses and said to beinferior for paint industry but a betteroption for textile industry.

The DPPL operations

The Production:

The signif icance of Chloride process formaking TiO2 for DPPL, happens to beboth technology driven as well ascustomer application driven.

Titanium dioxide (TiO2), also referredto as Titania, is a substance as old as theearth itself. Titanium Dioxide isessentially harvested from sea. Thebeaches with a wealth of rare earthminerals help obtain not only TitaniumDioxide, but various other productiongrade minerals, such as Zircon,Monazite, Magnesium etc. The MineralSeparation Unit (MS Unit) of DPPL isengaged in the separation of Ilmenite,Rutile, Leucoxone, Monazite, Silliminiteetc. from the sand obtained frombeaches by open mining. The MS Unitemploys Gravitational, Magnetic & HighTension Electrostatic Techniques forseparation of minerals from the sand.Raw Ilmenite is chemically processed toremove impurities such as iron, leavingthe pure, white pigment available foruse. DPPL is India’s f irst and onlymanufacturer of Rutile Grade Titaniumdioxide using the chloride process.

Another unique product offered byDPPL is Titanium Sponge. Theproduction technology being adoptedfor production of titanium sponge is abatch process based on the Kroll process.The titanium sponge plant is designedto produce 500 TPY of commerciallypure Titanium sponge by the reductionand pyro-vacuum distillation ofanhydrous titanium tetrachloride(TiCl4) with Magnesium.

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The company, maintained theproduction levels of TiO2 at 40,000 MTand Sponge at 500MT to meet thedemand of its clients. While it was ahuge accomplishment in 1990s, itsambitions to increase production to60,000 MT in the f irst phase and thento 100,000 MT subsequently, didn’tmaterialize till date. Companyintroduced few incremental changes inthe mechanical and chemical processingequipment but the overall technologyand production process unchanged. Asa result, it appears to have becomesensitive to the costs of oscillatingdemand - when the prices are low, itsprof its plummet and over stockingbecomes unavoidable. DPPL has veryhigh f ixed costs, about 200 croresannually, and its guessed that increasingproduction capacities, might help inachieving economies of scale as well asharvest experience curve effect inbringing down the production costs.

As of April 2017, the cost of producingTiO2 for DPPL went up to Rs.1,36,000per MT which, in the understanding ofDPPL, is very high as compared toindustry standards. It was observed thatthe manufacturing costs of DPPL arehovering around 73-95% of total sales.A comparative sales and cost data for thelast ten years is given in Exhibit 3.

It was noted by the dealers of DPPL thatcompetition from the Chinese brands ismainly driven by aggressive pricing, withprices operating in Indian markets at lessthan Rs.1, 30,000 per MT.

Rao, thinking loudly, interrupted themeeting and said to his team and to theintern, “one of the key challenges will

be to address the cost competitiveness,in order to protect Indian markets fromthe aggressive pricing adopted byChinese players; how do we crack it?Continuing, Mr. Rao said that he wantedto know, whether expanding theproduction capacities will help inmeeting the cost challenge, whilebringing larger quantities into market?Or will it only add to the woes of unsoldstocks?

A back of envelope calculations wasquickly made and GM, Operations hada view that expanding the productionlevels to 100,000 MT will help briningdown the costs to less than Rs. 100,000/- per ton. The discussions then movedto address the questions… will it bepractical and feasible to achieve? CanDPPL push its present manufacturingfacility to produce 2.5 times of its presentproduction levels without expanding themachinery and other factoryinfrastructure?

One other challenge that the meetingbrought forward was with regard tointroducing new technologies toproduce TDO cheaper and in largerquantities? Are the TiO2 manufacturingtechnologies changing? Could DPPLcontemplate to become world-class, interms of processing and production, byinvesting in pro-environmentalmethods of sand mining and cleaning,without exposing workers and thenearby localities to possible radiationeffects and affluent management? Arethe present methods of recycling theprocessed sands for ref illing of sandmined pits safe for the society? CanDPPL offer TiO2 and Titanium Sponge



in international markets by competingagainst players offering TDO and TS ofInternational Standards with a premiumfor being eco-friendly and pro-earth?Are there Certif ication Standards thatvouch-safe the Pro-earth processes atDPPL?

The current pollution controlprocesses at DPPL

DPPL has an elaborate Pollution Controlsystem with respect to both water andair pollution. The plant uses recyclingand regeneration methods at variouslevels of processing, including acidregeneration, which helps maintainminimum to negligible levels ofpollution. Responsible harvesting ofsands from the seas reaff irms DPPL’scommitment to the environment.

The waste (acid) from illmeniteBeneficiation Plant are sent to EffluentNeutralization Plant (ENP). ENP consistof a Primary Neutralization Tank (PNT)and Secondary Neutralization Tank(SNT) where it is treated with causticsoda solution. The totally neutralizedslurry from the SNT is pumped to 50000m3 capacity setting pond provided withimpervious clay, polythene lining atbottom side where the solids are settled.The dye solution from setting pond of25000m3 capacity where the balancesolids are allowed to settle. Then cleanwater from the polishing pond meetingall specif ication stipulated by PollutionControl Board authorities is pumped into the Arabian Sea.

All gases from Chlorination, Oxidation,Illmenite Beneficiation Plant and AcidRegeneration Plant are passed throughscrubbed water or caustic solution to

absorb the toxic gases diluted withenough fresh air and only let out to theatmosphere through tall slacks.

DPPL’s Markets:

The company has a host of dealersaround the country and from theanalysis of sales data is was noted thataround 80% of the sales is accounted bythree dealers situated in Mumbai, Delhiand Coimbatore, nearer to the pigmentconsuming industries. A cursoryanalysis of company incentives f lowshow a large share of the sales incentivesare garnered by these three dealers,leaving out others and also direct buyersand smaller retailers. expense onincentives has gone up. Also the smallretailers are not coming to the companydirectly and actually going to thosemajor dealers for better prices.

DPPL deals directly with some of theTDO end-user customers whoseminimum monthly off take is 15 tons ormore; some of the prominent paintbrands in India procure their pigmentfrom DPPL directly and DPPL is apreferred supplier for other public sectorenterprises requiring TDO and/or otherminerals. DPPL handles export marketsby adopting ushes a lot by offering deepdiscounts. The exports also help in toearn signif icant export promotioncredentials.

Buyers and sales networks

In DPPL distribution is divided into twomajor categories:

1) Direct Supply:- Direct Supply to theactual customers who require sevenmetric tons or more at a time.

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2) Supply through Stockists:- Suppliesto SME sector buyers are donethrough stockists appointed by thecompany in all major cities. Companyfixes prices for its products and thestockists are responsible to see thesales are made at these prices. All thegrades of Ti02 pigment produced inDPPL come under the category ofindustrial goods.

Direct Customers

For the company another importantchannel of sales is by way of directcustomers. The company in previousyears used to handle many directcustomers lifting about 1000 MT permonth but during the current year DPPLserviced only one buyer, who is lifting ata monthly average of 400 MT.

Some of the key direct customers of theproducts of DPPL are:

Asia Paints HLR Shaleen Paint Nerolac Colours Jenson and Nicholson Sand Chemicals Mega Meditex Camlin Chemicals Plastic Chemix Industries Verjar Paints Rajdoot Chemicals

They can be classif ied as small, mediumand large buyers, as below:

The key factors that led to many directcustomers moving away from DPPL areidentif ied as:

Lack of assurance for constant supplyof the pigments. DPPL does not caterto demands of some grades over aparticular quantity on monthly basis

It does not support producingspecialized grades as per the particulardemands of these customers. Itbelieves in supplying generic grades.

Its range of products is not wide andorganised. The competitors have, forexample, almost 5 grades for printingink pigment.



Export Market

Even through DPPL faces stiffcompetitors from multinational giants,DPPL receives a number of export ordersfrom customers abroad (through e-mail,fax and through correspondence). DPPLenjoys good reputation for qualitypigment in the international market.The company is exporting its productsin Korea, South Africa, Sri Lanka,Turkey, Dubai, China, Mauritius, UKand Philippine. The company is nowexporting approximately 30% of theirproduction. It has plans to increase toits export share to 50% by 2018.

The Marketing and Sales Operations

DPPL has a monopolistic hold inTitanium Dioxide (TiO2) pigmentindustry. DPPL is a public limitedcompany that stands as a leader inproduction of TiO2. The company has alarge number of customers from all overthe world and outside. The marketingdepartment is engaged in selling of thecompany’s product. There is no separatedepartment for sales and marketingmanagement also performs thesefunctions. The marketing section keepsdetailed report about customers’product orders, product group control,dispatch and payment. The team ensuresthat the products supplied alwaysmaintain high standards of productdelivery and quality assurance, workingwith the production team in achievingtechnical excellence in every phase ofproduction.

DPPL f ixes the price of Ti02 is based onthe market conditions in which topmanagement is fully involved. Pricerevisions are cleared by its Chairmanand the Finance Secretary of the

Government of Kerala. The price isperiodically revised, closely monitoringmarket fluctuations.

As at the time of this narration, duringJune 2017, the selling price of all gradesofTiO2 (Rutile Grade Pigment) was Rs.194000, plus 16% Excise duty and GST.

During the presentation, Krishnaprovided the details of various gradesof Titanium Dioxide that are beingincreasingly sought by dealers and end-users, which command a price premium,based on supplier’s ability to match thegrade and quantity with the deliveries.Exhibit 1a provides details of thesegrades. While DPPL acknowledges thatsuch customization offers a very highpremium to the supplies of DPPL, it isstill not sure if it can f ine tune theproduction processes to manufacture asmany grades of TiO2 and also what arethe price premium these gradescommand.

IT and MIS Application:

Rao, realising that IT and MIS tools area basic requirement for any f irm that isseeking to build market leadership, isnot very sure whether the company caninvest in IT related infrastructure andsystems to augment its marketing. Raois aware that DPPL has its customer basein overseas market also so these toolsenable them for speedy and eff icientresponse. In fact, it would be the righttime to build a CRM system so as to beable to offer better services to itsdomestic and international client’s andensure that they continue to patronagethe products of DPPL. The company hasits own IT team which develops inhouse tools for different departments. Now this has created islands of

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information in departments likemarketing and f inance, leading to slowflow of information. This has an impacton customers’ grievance settlementand relationship. The processes ofgenerating bills in different departmentsfor same utility leads to repetitive workand wasting human resource too.

Another set of people who are crucial forprofits are its sales network. KrishnaJoshi, emphasised the value of CRMreferring to his interactions with one ofthe consistent selling dealers of TiO2,Mr Jay Rao, based out of Coimbatore,who said, that relationship buildingefforts taken by some of DPPL’s

competitors is very impressive and hasforced them to give more priority tocompetitor brands. They lack theexpected communication towards theproblems faced by customers andsales partners.

By the time Rao listened through thepresentation, these were the thoughtsthat kept on lingering in his mind, whilehe went back to complete the task ofdeveloping the Strategic Plan for hiscompany that needs to address shortterm and medium term challenges in afast growing, high stakes industry, thatis built on seemingly abundant naturalresources.

Exhibit No. 1: Products and their sales volumes at the end of 2015-16

Exhibit 1A: Grades of Titanium Dioxide produced by DPPL as in 2015-16



Exhibit 2: sales and prof its of DPPL over the years

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Exhibit 3: Installed Capacity, extent of utilisation and actual production of variousproducts at DPPL

Exhibit 4 : Some facts and f iguresrelated to TiO2 Industry

Note: This data is accumulated fromIndian ports where the imported TiO2is received. It explains the steady rise inthe stronghold of foreign players in thedomestic market. The productioncapacity of DPPL is almost steady for allthese years but the steep rise in quantityimported shows the market lost by DPPLand growing acceptance for the productswhich could make the future diff icultbecause once a customer changes to adifferent brand of TiO2 some changesin the production process have to bemade and hence that customer becomesa lost opportunity.

Exhibit 6: Sales of DPPL - share ofdomestic and international sales

Exhibit 6a: ratio of domestic andinternational sales in percentage of totalsales – (all products rupee value)

Exhibit 5: Consumption of TiO2 AcrossIndustries



Exhibit – 6b : sales revenues and total expenditure e incurred by DPPL

Exhibit 7: Sales of various products of DPPL for the last ten years (in MT)

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Exhibit 8: Certifications of DPPL

1) SO 9001:2000

Certif icate from Bureau Veritas QualityInternational (BVQI) and holescertif ication of United KingdomAccreditations Service (UKAS). TheUnited Kingdom Accreditation Serviceis the sole national accreditation bodyrecognized by government to assess,against internationally agreed standardsof an organizations that providecertif ication for testing, inspection andcalibration services. And accreditscertif ication from ANSI-ASQ NationalAccreditation Board(ANAB) is the U.S.accreditation body for managementsystems, ANAB is a member of theInternational Accreditation Forum anda signatory of the IAF MultilateralCooperative Arrangements (MCA) ,ANAB ensuring accredited certif icateswhich are recognized nationally andinternationally for good qualitymanagement system.

2) ISO 14001:2004

Certif icate from Bureau Veritas QualityInternational (BVQI) and accreditscertif ication of National AccreditationBoard for Certif ication Bodies (NABCB).NABCB is a member of InternationalAccreditation Forum (IAF) havingMultilateral Recognition Arrangement(MLA) to certify ISO 14001 -Environmental Management System.And holes certif ication of UnitedKingdom Accreditations Service(UKAS). The United KingdomAccreditation Service is the sole nationalaccreditation body recognized bygovernment to assess, against

internationally agreed standards of anorganizations that provide certif icationfor testing, inspection and calibrationservices.

3) OHSAS 18001:1999

Certif icate from Bureau Veritas QualityInternational (BVQI) The OccupationalHealth and Safety Assessment Series(OHSAS) specif ication givesrequirements for an occupational healthand safety (OH&S) managementsystem, to enable an organization tocontrol its OH&S risks and improve itsperformance.

Exhibit 9: National and Internationalawards conferred on DPPL

National award for R & D effortsindustry for the best research anddevelopment efforts by departmentof Science and Technology(1992)

FACT MKK NAIR Memorialproductivity Award 1993-94, 1994-95for the best productivity performanceby Kerala State Productivity Council

Energy Conservation Award 1999 inappreciation for outstandingachievements towards energyconservation and management in thecategory of large scale industries

FACT MKK NAIR Memorialproductivity Award 2001-02 forsecond in productivity performanceby Kerala State Productivity Council2001

FACT MKK NAIR memorialproductivity Award 1999-2000, 2000-01 for f irst in productivityperformance(Large Organization) byKerala State Productivity Council



Energy Conservation Award 2001 forconservation and management in thecategory of large scale industries byEnergy management centre Kerala 2001

Award for Revenue performance2003 for the best performance bycentral excise, customs KollamDivision 2003

Marketing campaign Award 2003 forbest marketing campaign by Asiapacif ic coating 2003

International gold medal for theQuality of the product and efficiencyof the company by Forum KeralaLumpur Global Rating UK 2003

Special Export Award for exportperformance by chemicals and AlliedExport Promotion Council(CAPEXIL) sponsored by ministry ofCommerce Government of India2002-03

Diagram 1: Titanium Dioxide Production – Process Difollowed by DPPL

Process Chart

The Manufacturing Plant at DPPLcomprises the Mineral Separation(MS) Unit and the Titanium dioxidePigment (TP) Unit.

The MS Unit is where the separation ofIlmenite, Rutile, Leucoxone, Monazite,Silliminite etc from the beach sand takesplace, through the various stages in theWet Concentration Plant, Dryer Plant,Dry Mill, Rutile & Zircon RecoveryPlants. The MS Unit employsGravitational, Magnetic, High tension

electrostatic techniques for separationof minerals from the sand.

The TP Unit is where the raw Ilmeniteobtained from the MS Unit is taken forfurther processing, through the variousstages in the Ilmenite Benef iciationPlant, Acid Regeneration Plant, PigmentProduction Plant, Oxygen Plant &Utility Section. Titanium Dioxide ismanufactured here using the chlorideroute.

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*This case has been prepared based on the various secondary sources meant forclass discussion rather than to illustrate either effective or ineffective handling ofan administrative situation. Names of people referred have been camouflaged toprotect their identity and relations within and outside the organisation and helpsimpler understanding of the case.


Diagram 2: Production Process followed by DPPL in making Titanium Sponge

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DECCAN PIGMENTS AND PAINTS LIMITED (DPPL): STEERING ... · Pigments and Paints Limited (DPPL), was busy giving a final touch to the next Three-Year Strategic Plan for 2018-20, for