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“Adding Value to Commodities”
Presented by:
Divya Boddu (07) Saurabh Goswami(10) Kamlesh Kunhara(16) Navjot Kaur Nagra(20)
Nitika Singh(22)
Sagar Shinde(38)
COMMODITY CHAIN
3
Farmers getting just 35 % of consumer rupee against 65-70%
Less focus on forming forward and backward linkages Poor Infrastructure – Storage, Packaging,
transportation / no cold chain Poor linkages in the marketing channel High level of post harvest wastages due to poor and
multiple handling Improper bagging without crating Perishable agro-commodities very sensitive to post
harvest facility & care Have potential of saving post harvest loss of agro
commodities (10-15% in grains & 30-35% in fruits and vegetable)
More emphasis on quality of food shift from quantity to quality (nutrition) food
CHALLENGES IN AGRO
COMMODITIES PHYSICAL SUPPLY CHAIN
INITIATIVE FOR SUPPLY CHAIN INFRASTRUCTURE
Infrastructure efforts should concentrate on Integration between farmers and markets Supply chain gaps in Inputs i.e farm inputs,
machinery, consultancy for productivity & quality improvement, credit.
Provide seed capital for development activities of value adding infrastructure i.e. Marketing, Storage, Processing & Export.
Forming national level association dedicated for post harvest infrastructure development initiatives and education
WAREHOUSING
Warehouse are commercial buildings for the storage of goods.
These are usually large, plain buildings in industrial areas of various cities and towns.
In India, its was started in 1957 under the name of Central Warehousing Corporation, which provided logistic support agricultural sector.
These are used by Manufacturers, importers-exporters, wholesalers etc in transport business.
National Bulk Handling Corp.
India's leading integrated commodity and collateral management company
First and only such service provider in the country to obtain an ISO 22000:2005 certification
'Category G' membership of GAFTA (The Grain and Feed Trade Association, UK).
A part of a unique commodity ecosystem. Provides Complete Solutions in Commodity
and collateral Management Stakeholders: FTIL & group Com. (MCX and
NSEL) SBI (30%)
NBHC- Services
Storage and Bulk Handling Services Warehousing Bulk Handling Weighment Loading/Unloading Logistics Farm gate handling services
Integrated Pest Management Services
Integrated Pest Management Maintenance Contracts Fumigation and Commodity Pest
Management
Testing and Certification Services Quality Testing & Certification Commodity Grading & Certification Cargo Inspection
Cont…
Structure of NHBC
Headquarter (Mumbai)
Regional office -PuneRegional office -DelhiRegional office - Indore
363 warehouses in 17 states
Chairman
Business development
Quality assuranceOperations Commodity core and
pest managementAuditing & vigilance
Zonal VP & BD
ASST V P
GM
SRM
RM
ARM
CORPORATE RELATIONSHIP
Company Product
ITC Ltd Wheat , Maize
Cargill Wheat, Maize
Adani Group Soyabean, Sunflower, Jawar, Bajra
Tirumala milk Milk powder
Godrej Agrovet Maize
FARMER
AGRI-WARE HOUSE
BANK
QUALITYCONTROLTESTING
QUALITY ASUURANCEREPORT
SAMPLE
FOODPROCESSING
INDUSTRY
REJECT
BANK
COLLATERAL CERTIFICATION
LOAN SANCTION
14
INHERENT RISKS IN COMMODITY SUPPLY CHAIN
Agro-Commodities by nature carry some inherent risks, resulting into wastage and monetary loss during handling and logistics
Risk Result
Market RiskPrice risk , Demand risk, Payment risk ,Access risk
Operational Risk Quality risk, Quantity risk
Performance Risk
Documentary risk , Security risk
Credit Risk Interest risk, Access risk, Cost risk
Policy Risk Policy risk
COLLATERAL MANAGEMENT SERVICES•NBHC Cecure provides collateral management services based on structured warehouse accreditation & operational fundamentals. Assurance of quality and quantity of the commodities is provided to both depositor and lender.
•NBHC Cecure’s Risk Management is a cyclic process. They adopt a 4-step process which includes Risk Identification, Risk Measurement, Risk Management & Financing. This process is methodical and proactive, and helps Lenders Manage Risk and Maximise Value.
RISK MANAGEMENT- BEST PRACTICE
Risk NBHC Risk Management Solutions & Practices
Market Risk
•Warehouse Receipt Financing , •Trade Consultancy, •Procurement & Disposal services for standardized commodities,•Information services-Commodity futures reports (NBHC Technical Reports)
Operational Risk
•ISO 9001:2000 Complied standard operating procedures•Warehouse Accreditation, •Warehouse Audit / Vigilance, •Logistics services *•Commodity analysis and protection solutions (NBHC ProComm & NBHC CommGuard)
* In Process
Risk NBHC Risk Management Solutions / Practices
Operational Risk•Human Resource Expert and Experienced in commodity management•Farm gate handling services*
Performance Risk
•Secure Warehouse Receipt ( 6 security features)•Insurance / fidelity /security /close circuit cameras•Strict adherence to ethical trade practices
Credit Risk
•Collateral management services,•Periodical Information reports on collateral status and commodity prices (NBHC IntelliComm)•Commodity futures reports (NBHC Technical Reports)
Policy Risk
* In Process
RISK MANAGEMENT- BEST PRACTICE
OPERATIONS Loan = Max.70-75% of the value of
produce Duration of storage should not exceed 6-
8 monthsExample: Warehouse capacity-1000MT Area of warehouse-10000 ft2
Stake height – 14 bags for 100kg bags
Requirement : 01 Supervisor @6000/month 1-2 security personnel @5000/month Quality testing Documentation : Quality report,
Commodity acceptance documents, Insurance(0.25%)
Delivery by customer up to warehouse Charges:10% of total value + expenses
Requirements cont…
Service Request Form Commodity Deposit Form Customer Declaration Document Revalidation of Commodity Form
STORAGE Design of warehouse On wooden planks Fumigation: ALP Spraying:DDVP,CH3Br Periodical checking Regular cleaning Equipments: Fork lifter, Nylon nets, Bamboo mats, Sprayers and sand snake
THE NEW ECOSYSTEM
NBHC Advantages Tie-ups with 24 major banks Single point solutions for quality
assurance, fumigation and other storage-related services
Providing early warning signals on price fluctuations, commodity quality
Insurance (Fire, Burglary and Special Perils) and Fidelity Policies
24-hours security Secure warehouse receipts
Access to Futures & Spot prices from MCX & National Spot Exchange Limited trading platforms
Demat facilities Logistics arrangement >500 trained and expert staffs >90 commodities Quality checks, warehouse accreditation,
warehouse audits, commodity analysis etc.
Cont…….
Benefits To Banks - Reduced risk + Wider customer base = More profits
Benefits to Warehouse Owners - NBHC accreditation = Professionalism = Goodwill = More business
Benefits to Farmers, Merchants, Corprates (Depositors) - Convenience of one-point contact + Access to real-time market information + Nationwide reach = Hedging price risk + Access to new markets = More business + More profits
Benefits to Logistic Agencies - Nationwide network + Access to real-time market data = Higher market penetration + Smooth commodity movement = Goodwill = More business
Benefits to Quality Certification Agencies - More business + International standards = Reduced overheads = More profits
LIMITATIONS Still in growing stage Lack of awareness among customers Lack of support in the form of policies Not feasible for the commodities which
are highly perishable.
ACKNOWLEDGEMENT
Mr.Suresh Hattlli, Zonal Manager,NBHC, Pune.
Mr.Piyush Pathak, Field Manager, NBHC, Aurangabad.
Mr.Asaram Morage, Manager , Agilility warehouses Pvt. Ltd, Wagholi
www.nbhcindia.comwww.nbhcindia.com
Title page
THANK YOU