Brief Overview On Rahimafrooz Bangladesh Limited
Company overview Rahimafrooz Bangladesh Limited (RABL) is the Group Holding and Parent Company including the Group Corporate Center that guides the Strategic Business Units (SBUs). It ensures continuous management innovation, technology adoption, new initiatives, corporate governance and compliance. Now Rahimafrooz is one of the respected and reputed business houses in Bangladesh. It has crossed 54 years of operation. Rahimafrooz has endured turbulences of the last 50 years and has been able to transform itself from a small trading company into a leading diversified business house. This is, indeed, a milestone, which Rahimafrooz has achieved with trust, support and dedication of all stakeholders, past and present, most importantly, its customers. Today, Rahimafrooz has emerged as a respected national company by upholding high ideals and values, solemn integrity & honesty, excellence, service and innovation in all spheres of the company’s activities building on the already established foundation. Company Vision Rahimafrooz (Bangladesh) limited already pass their 50 year with the people of this country as well as with many other foreign countries. The corporation vision is “To be the most admired and trusted organization through excelling in everything we do, following ethical business practices and adding value to stakeholders”. Its long term vision is to establish” Rahimafrooz” as world wide well known brand. One of its announced visions is becoming an enterprising Group of Taka 2,000 crore by the year 2010 with a
diversified business portfolio focused on dynamic growth, excellence, innovation, customer delight in enriching our world. Company Mission •
Pursue to operate as a market oriented company.
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Ensure quality product and service excellence for total customer satisfaction.
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Endeavor for constant enhancement of technical and professional skills of our people.
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Maintain high ethical standard in all spheres of operation.
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Respect the social norms and customs and contribute to the welfare of the society.
Company Aspiration We strive to be the most admired and trusted organization by excelling in everything we do, following ethical business practices and adding value to stakeholders. Company Values Rahimafrooz (Bangladesh) limited has several values by which it tries to satisfy its customers and try to achieve their organizational goals. There are four specific values which are: •
Integrity in all our dealings
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Excellence in everything we do
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Total commitment to customer satisfaction
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Thinking ahead and taking new initiatives
Products and Capacity Rahimafrooz has state of the art manufacturing plant. It is equipped with all latest technologies with complete air treatment and lead-recycling management. RBL produces different types of batteries to meet the local and international market. Its capacity in Automotive Battery is 660,000 (N50) units per annum and 15 million AH of Industrial Battery per annum. All the products are manufactured under strict quality control and ensured by international certifications. Its main product range includes:
Brands
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Automotive battery
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Motorcycle battery
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Appliance battery
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Deep cycle – Flat plate battery
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Industrial tubular battery
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VRLA battery
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UPS
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Solar system
Rahimafrooz markets batteries in different brand names such as Lucas, Optus, Rahimafrooz, Spark and Volta, of which Lucas is the most common local brand and Volta and Optus are more popular in foreign markets, Optus being the premium brand. It has different technical collaboration agreements with Lucas Battery Company, U.K, Technical support Group (TSG), Hawker Batteries, UK, Invensys, UK, Hawker Batteries, UK, Eltek – Norway, AEES – France to ensure the quality of battery.
Rahimafrooz Batteries Rahimafrooz Distribution Rahimafrooz Solar
Independent university Bangladesh (IUB)
Rahimafrooz CNG The financial express
Metronet Bangladesh
Rahimafrooz
Social Investment Rahimafrooz Superstore Excel Resource GreyFad
Rahimafrooz Energy Service Asia Tex
Figure 5: SBUs of Rahimafrooz Ltd Highlights of company History of Company - 50 Years of Growth Major Drivers Behind Business Growth •
Founded in 1954 by Mr. A.C. Abdur Rahim
American Super Specialty Hospital
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Distributorship of Lucas Battery in 1959
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Appointed exclusive distributorship of Dunlop tires and launched it in the market in 1978.
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Acquisition of Bangladesh operations of Lucas Company in 1980
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First and only producer of industrial battery since 1985
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Pioneering Solar Power in collaboration with BP in 1985
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Launched Rahimafrooz Instant Power System in 1992
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Attained ISO 9002 certification for RBL operation in 1997
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Aspiration & Values
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Management & Organization Restructure (MOR
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Awarded “Bangladesh Enterprise of the Year” in 2001.Attained ISO 14001:1996 for RBL operation.
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Launched Rahimafrooz Energy Service for promoting distributed power in 2002.
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Launched the first “Agora” outlet in 2001.
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Established Rahimafrooz CNG ltd. In 2003.
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Awarded “National Export Trophy” in 2003
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Received “McGraw-Hill Platt Global Energy Award” for Renewable Energy in 2004
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Received the “Ashden Award” for Sustainable Energy in June 2006.
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Aspiration & Values
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Management & Organization Restructure (MOR)
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To address MOR intent to separate ownership and management and V2010 growth plan to achieve following objectives.
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Increase Accountability & Performance
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Bring Best Management Practices
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Focus on strengthening People & Process Capability to achieve V2010 & beyond
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Key Strategic Tools For People & Process
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I + 10 Program
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(Adaptation of Stephen Covey’s Seven Habits & 360 degree Community Session Model)
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Balance Score Card
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( Four perspective : Financial Perspective, Customer Perspective, Internal Process Perspective, People Perspective)
Rahimafrooz Batteries Limited (RBL) Overview
(RBL) is also the largest lead acid battery manufacturer in Bangladesh and offers the most extensive range of automotive and specialized industrial battery. It manufactures more than 300 different types of battery in both JIS and DIN standard in ISO 9001 and ISO 14001 certified plant. Rahimafrooz Batteries Limited is the local leader in marketing automotive and industrial battery in Bangladesh. With excellent export growth rate it has also emerged as a major regional player. •
Rahimafrooz was incorporated in 1954 and it acquired Lucas Service (Bangladesh) Limited in 1980 and renamed it Rahimafrooz Batteries Limited.
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In 1985 RBL established industrial battery plant.
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In 2002 the company expanded the production capacity up to 300% at Savar Plant
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In 2006 the company expanded the production capacity by another 100% at Savar Plant
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In 2006 the Industrial Battery production capacity was increased by 100%.
RBL is divided into following parts: 1) Automotive battery marketing 2) Industrial battery marketing 3) Production 4) Procurement 5) Quality measurement
Organ gram
CEO
COO, RBL
DIR, GITC
GM, OPERATIONS
MAN. MARK. & SALES (AUTO)
MAN. MARK. & SALES (IB)
MANA, IT
MAN. GOVT. & REGUL ATORY AFF.
MAN. FIN & A/C
MAN. PROJ & TEC
MAN. CONT. MOUL. & LEAD RECY
MAN. PROC U.
MAN. HR & QMS
MAN. QA SAVAR FACTORY
FAC. MAN. SAVAR
IN CHARGE QA N.PARA FACTORY
Figure 6: Organogram of RBL
Products of (RBL) The Rahimafrooz batteries limited basically produce two major types of batteries:
OPE MAN. N.PARA FAC.
Automotive battery: Automotive batteries are basically use for vehicles like car, bus, truck, motor cycle etc. The auto batteries are marketed by Auto marketing department. Auto batteries are exported to many countries like United Arab Emirates, Qatar, Lebanon, Afghanistan, Kuwait, Singapore, Sri lanka, Nepal, Bhutan, India, Burundi, Angola, Ethiopia, Nigeria. Rahimafrooz Batteries Ltd produces more than 300 types of automobile batteries. The automotive battery industry is very much related to the automotive industry itself. Being a third world country, the usage of automotives in Bangladesh is very low. Previously, car batteries were imported from abroad. However, in 1959 Rahimafrooz pioneered in this industry in our country. With a low cost solution, they started taking over the market. Over the years, the usage of automotives grew as well as Rahimafrooz market share. Their Lucas brand became extremely popular and people would buy only Lucas when it came to car battery. 2. Industrial battery: Industrial batteries are basically used for electronic vehicles, instant power system/inverter, uninterrupted
power
supply,
instrument
&
medical
equipment,
railway
signaling
and
telecommunication etc. These types of batteries sometimes called "fork lift", "traction" or "stationary" batteries, are used where power is needed over a longer period of time, and are designed to be "deep cycled", or discharged down as low as 20% of full charge (80% DOD, or Depth of Discharge). These are often called traction batteries because of their widespread use in forklifts, golf carts, and floor sweepers (from which we get the "GC" and "FS" series of battery sizes). Deep cycle batteries have much thicker plates than automotive batteries. The Battery Market In the previous we have gained insight into RBL as a company. Now we will peer inside the battery market. At first, we learn about the different segments of battery. Then we gain brief overview of the automotive and industrial battery (IB). The different types of IB battery (traction and stationary) is discussed in detail, as well as their various applications. Then we focus on the local automotive market, detailing the domestic automotive market size, growth and market share composition. Then glance at the local IB market, discussing the major local customers of the IB market. Finally, we briefly look to the global battery market, going over the export history of RBL and examining their lack of global marketing plan and strategy.
The Battery Market: The battery market can be segmented into two types: primary (disposable) or secondary (rechargeable). Primary batteries are non-rechargeable devices. They must be replaced once the energy supply is depleted. Secondary batteries or rechargeable batteries contain active materials that can be regenerated (http://electroniccomponents.com). Since RBL only produces secondary batteries, this report will be focusing only on the secondary battery market. Two types of batteries are produced in secondary battery market; Automotive Battery and Industrial Battery. 1. Automotive Battery: Automotive batteries are basically used for vehicles like car, bus, truck, motorcycle etc. The automotive battery industry is very closely and positively related to the automotive industry itself. Being a third world country, the usage of automotives in Bangladesh is very low. Previously, car batteries were imported from abroad. However, in 1959 Rahimafrooz pioneered in this industry in Bangladesh. Over the years, the usage of automotives grew as well as Rahimafrooz market share. Their Lucas brand became extremely popular and people would buy only Lucas when it came to car battery. Over the years, the usage of automotives grew as well as the automotive battery market. Auto batteries are exported to many countries like United Arab Emirates, Qatar, Lebanon, Afghanistan, Kuwait, Singapore, Srilanka, Nepal, Bhutan, India, Burundi, Angola, Ethiopia, Nigeria Currently over three hundred types of automotive batteries are produced by the battery manufactures in Bangladesh. 2. Industrial Batteries (IB): IB batteries target the industrial segment. These types of batteries are used to back up the system in absence of continuous energy. Industrial batteries are basically used for electronic vehicles, instant power system/inverter, uninterrupted power supply, instrument & medical equipment, railway signaling and telecommunication etc. IB batteries can be further classified into the following two categories: 1) Stationary and 2) Traction. 2.1 Stationary Cells: Stationary batteries are often used for emergency power or uninterruptible power supply applications (http://www.pvcdrom.pveducation.org). Stationary batteries remain on a continuous float charge so
that they can be used on demand. They are used for applications where power is necessary only on a standby or emergency basis. These types of batteries are infrequently discharged. Stationary batteries are used for backup emergency power, telecommunication equipment and uninterruptible power supplies (UPS). (http://www.engineersedge.com). Major users of stationary lead-acid battery systems are companies engaged in telecommunications, emergency lightning, computers, standby applications, nuclear power plants and general industrial and petrochemical applications where power continuity is critical. (http://www.tudor.se). Stationary batteries include: VRLA batteries, UPS and Solar. VRLA batteries: The telecom sector is the largest user of industrial batteries or Valve Regulated Lead Acid (VRLA) batteries. The telecom sector uses BTS towers or base station towers. BTS holds the radio transceivers that coordinate the radio-link protocols with the mobile device. VRLA battery is used in BTS towers to give back-up power when grid power is off. The battery basically supports the interim gap between grid power outage and the time it takes for the generator to start. UPS: UPS stands for Uninterruptible Power Supply. UPS is a device used to support the interim gap between grid power outage and the time is takes for the generator to kick in. UPS applications include Data and Computer Centers (airline reservation facilities, banks, and brokers), Critical Service Facilities (airports, fire stations, hospitals and other health care facilities), Distributed Telecommunications (telephone companies, cable TV, Internet Service Providers, and cellular phone stations), Industrial Facilities (semiconductor plants, fabric mills, paper manufacturers, and printers).
2.2 Traction Cells: Traction battery is a high-power battery designed to provide propulsion to move a vehicle (http://en.wikipedia.org). Traction or motive batteries are used to provide electric power for small transport vehicles such as golf carts, forklifts trucks, etc. (http://www.pvcdrom.org). The term traction battery relates to all batteries used to power electric vehicles. Typical applications are motive power for forklifts and electric carts. Even thought Bangladesh is a labor-intensive country, the rapid growth of industrialization is leading to greater use of forklift trucks. Forklift trucks are used for lifting, stacking, retrieving and transporting materials. As the use of Electric Forklifts increasing day by day in different industries, the market potential is also increasing. Most of the firms, who have been using diesel as well as several other energy operated forklifts, are transferring to battery operated forklifts now a days for several reasons. As a result of this the Traction battery market size is increasing day by day. In Bangladesh, electric forklift are used mostly in the following three industry segments:
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Pharmaceutical
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Food
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Tobacco
Local IB Market: The bulk demand for industrial batteries (IB) in Bangladesh is accounted for by stationary batteries, which typically find applications in telecom networks, power plants and UPS systems. The telecom segment is the largest user of industrial batteries, followed by the railways. The power and UPS industry are other key users. Significant growth of Valve Regulated Lead Acid (VRLA) battery in mobile telecommunication sector has been seen with the following in the trail of the enormous growth in the telecom sector (Rahimafrooz Annual Plan 2007-08).The telecom sector is the largest customer of the local IB market. There are currently 6 telecom operators (Grameen Phone, Aklet, Citycell, Banglalink, Warid and Teletalk) in Bangladesh with over 18,000 BTS towers all over the country. Providing back up power for these BTS towers has lead to the expansion of the local IB market. IB market also consists of the government and private agencies. Power Development Board (PDB), Dhaka Electric Supply Authority (DESA), Bangladesh Telephone and Telegraph Board (BTTB), Telephone Shilpa Sangstha (TSS), Bangladesh Railway, Polli Bidut Shamity are the major contributors from the government sector. Growth in Solar sector is amplifying by the support of the international donor agencies to improve the rural infrastructure. Demand for supply of Electrical energy has increased significantly due to vacuum created in the power sector. Opportunity and growth can outsize any projection in Export market due to the demand and supply gap of Industrial batteries in export market. Global MarketPast, Present and Future of Export Rahimafrooz started its first export when in inquiry came from Singapore in 1995, now they export a respectable numbers of batteries to more than twenty countries in the world. Export History In 1993 Singapore Chloride Batteries inquired whether RBL can make battery plates for them. RBL exported its first battery to Singapore to the same company in 1995. In 1997, in order to utilize extra capacity the owners decided to open an office in India and sell their extra production there since it
was the neighboring county. Within the next 3 years RBL started getting orders from Bhutan, Mauritius, and many other countries. Now, in 2008 Rahimafrooz batteries go to at least 20 countries over the world. It now exports not only to Asian countries like Bhutan, Sri Lanka and Afghanistan, but to countries like UAE, Lebanon and even Venezuela. However these exports have no definite marketing plan, no marketing communication schemes or strategy. The orders are irregular, sporadic and got solely through inquiries from companies or their agents who happen to come across Rahimafrooz’s name from some acquaintances or from the Internet or from any occasional foreign trade fairs participated in by RBL. The Global IB Market In the previous chapter, we depicted the global automotive battery market, and in this chapter we will depict the global Industrial Battery (IB) market. We look at the main segments of IB based on their applications; forklifts, telecommunication, solar and UPS. Each of these segments is examined in detail. First we glance at the forklift industry. The industry drivers, global battery market, market growth, the traction battery market and global competitors in the forklift market is discussed in detail. Then we move to the telecom industry, glancing at the industry drivers, battery market, market growth and customers. Next we show the solar industry, describing the industry drivers, global market and market growth in detail. Lastly, we peer at the UPS industry, illustrating the different application segments, industry drivers and the global UPS market. Overall, from this chapter, we will be able to get a full and complete view of the global IB market, gaining insights into emerging markets and opportunities in this very lucrative and attractive market segment. The Global IB Market: The industrial battery (IB) market can be segmented into four important segments based on their different applications. These are forklift (traction battery), telecommunication (VRLA battery), solar (PV) and UPS. There are other segments besides the above mentioned but the remaining segments are not that significant. In this report we will be focusing on these four segments: The global forklift truck market is approximately $29 billion in annual revenue (www.ariba.com). The global electric forklift market is about $6 billion (www.fuelcellsworks.com). So this is the market where the traction battery is used and this huge market shows the future perspective of traction
battery. The annual market revenue opportunity for battery manufacturers in the forklift market is at $1.5 billion.
Globally the industrial truck market has occupied by different region world-wide. Among them Europe capture the most with a global market share of 43.8%. The second largest market is Asia, which has 25.4% market share followed by North America with 24.9%. This region is occupied by 24.9%. The rest of the world occupies only 5.8% of the market North America North America forklift market, which consists of USA, Canada and Mexico, has almost 25% of the global market. There are over 100,000 electric forklifts active in the United States alone, which means the traction battery market opportunity is very impressive. Electric forklift constitute about 57% of total forklift sales in North American. Even though the forklift market size may seem very impressive, one critical factor to note is that the forklift market growth reflects the overall economic outlook. The forklifts industry mirrors the state of the economy. When the economy is growing, it gives strong indication that industrialization is growing. The stable and growing economy encourages manufacturing companies to increase capital investments in plant equipments like forklifts. Forklifts are a capital expenditure for most companies. When times are good, companies open their wallets a little more and buy capital equipment. When times are slower, that's when you see industries like the forklift industry flatten out or go down a little (http://findarticles.com). Therefore it is usually evident that when the economy is doing well the forklift industry increases and vice versa. Since the US economy is going through a recession, the forklift industry may also be going through a slump as a result. Europe: Europe is the largest market for forklift. The European market for forklift continued to grow significantly in continuation of a decades-long period of solid growth. Recently been a marked increase in cyclical demand. Market growth was strongest in Eastern Europe benefiting from the dynamic trend witnessed in Russia 70% of forklift trucks in Europe are electrically powered. In this continent Germany has bigger portion by having 23% of the total European market. France has 19%, UK and Spain has 10% of European market. Market Growth: The market for forklifts tends to follow the general economy. Demand is diversified across major industrial sectors. Prior to 2000, the forklift market has been a steady market with growth between 4%
and 5% annually. The recession of 2001 caused this market to lose some 7% of its value in 2001 and 2002. Recovery began in 2003 and continues through 2006 at a torrid pace. The forklift market grew 15% in 2006 (www.iuvmag.com). Demand for forklift is dominated by Asia, North America and Europe with various regional growth rates, such as: Asia has the 18% growth rate, Europe has the 4% and North America has the 8% growth rate in their own forklift market. The Traction Battery Market: The overall traction battery market is mainly consistent of electric forklifts, which constitute about 95% of the traction battery market (http://dcpowergroup.com). Europe is the largest for producer of traction battery. The second biggest production house is North America. The overall global traction battery production is worth of $1.74 billion (http://dcpowergroup.com). The Global Competitors: There are hundreds of companies who supplies traction battery to the electric forklift industry. Among them C&D Technologies, Inc., Crown Battery, CSB Douglas Battery Mfg. Company, GNB Industrial Power, Kung Long Battery, Leoch, Panasonic (Worldwide), Power Sonic Corporation, Power Battery Company, Inc., Yuasa/U.S., U.K., China, Taiwan etc are the popular battery company world wide. TRACTION BATTERY MARKET: BANGLADESH Traction battery The term traction battery relates to all batteries used to power electric vehicles. This can mean anything from a mobility scooter to a fork-lift truck, so encompasses capacities from 30 or 40 Ah to many hundreds. The smaller traction batteries are usually 6 or 12 Volt units; where the largest are single 2 Volt cells. Traction batteries are ideal for solar power applications, as they are intended to be fully discharged and recharged daily. The larger traction batteries can withstand thousands of discharge cycles. There are also batteries known as semi-traction batteries, which can be thought of as higher quality leisure batteries, exhibiting a greater cycle life. Marine batteries also fall into this category. Traction batteries are used to provide motive power for electric or hybrid vehicles. The major emphasis on traction battery design is the necessity of a high capacity to weight and volume ratio, since the vehicle must also carry its power source. Traction batteries are frequently deep cycled and require a fast charging rate for use usually within 24 hours. Typical applications are motive power for
fork lifts and electric carts. Traction batteries are usually of the tubular plate design, which performs more favorably during deep cycle operation. It goes without saying that low cost, long life (more than 1000 cycles); low self discharge rates (less than 5% per month) and low maintenance are basic requirements for all applications. Traction batteries generally operate in very harsh operating environments and must withstand wide temperature ranges (-30°C to +65°C) as well as shock, vibration and abuse. Low weight however is not always a priority since heavy weight provides stability for material handling equipment such as fork lift trucks and the grip needed by aircraft tugs for pulling heavy loads. Low weight is however essential for high capacity automotive EV and HEV batteries used in passenger vehicles and this rules out Lead Acid for these applications. Traction battery: Characteristics •
Battery must be capable of regular deep discharge (80% DOD) operation
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Designed to maximize energy content and deliver full power even with deep discharge to ensure long range.
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A range of capacities will be required to satisfy the needs of different sized vehicles and different usage patterns.
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Must accept very high repetitive pulsed charging currents (greater than 5C) if regenerative braking required.
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Without regenerative braking, controlled charging conditions and lower charging rates are possible. (At least 2C desirable).
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Routinely receives a full charge.
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Often also reaches nearly full discharge.
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Fuel-gauging critical near "empty" point.
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Needs a Battery Management System (BMS).
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Needs thermal management.
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Typical voltage - 48-80 Volts.
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Typical capacity – 200-900Ah.
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Typical discharge current up to C rate continuous and 3 C peak for short durations.
Because these batteries are physically very large and heavy they need custom packaging to fit into the available space in the intended vehicle. Likewise the design layout and weight distribution of the pack must be integrated with the chassis design so as not to upset the vehicle dynamics. These mechanical requirements are particularly important for passenger cars.
ELECTRIC FORKLIFT A Forklift truck (also called a lift truck, a High/Low, a forklift, a stacker-truck or a sideloader) is a powered industrial truck used to lift and transport materials. The modern forklift truck was developed in the 1920s by various companies including the transmission manufacturing company Clark and the hoist company Yale & Towne Manufacturing. The forklift truck has since become an indispensable piece of equipment in manufacturing and warehousing operations. Forklift trucks are available in many variations and load capacities. In a typical warehouse setting most forklifts used have load capacities between one to five tons. However, machines of over 50 tons lift capacity have been built. An electric forklift is really a manufacturer's or warehouse company's best option of all the forklift trucks that are now available. In fact these forklifts are ideal for working indoor in any type of business. Electric forklifts are ideal for indoor use, as they do not generate emissions, but cannot be used outside, except on smooth paved parking lot type areas. Gas or diesel powered forklifts can never be used indoors because of their toxic emissions and fear of carbon monoxide poisoning. Electric forklifts are inexpensive to run, as there is no fuel cost involved, but they cost more initially. Electric forklifts are quiet, another plus for indoor use, and do not need storage areas for gas or diesel fuel. Following is a chart of pros and cons for electric forklifts. Firstly they do not produce any emissions so they are good to the environment. Plus if a company needs to use a forklift truck inside the other models which have internal combustion engines need ventilation including those that are fueled by propane. Plus both diesel and gas powered models should not be used inside at all. The other reason why electric forklifts are ideal is the cost of them to run. These forklifts cost less to run than any other types of forklift trucks that are available. But although they cost more to purchase initially the actual cost of investing in one will soon offset this cost. As well as the two reasons provided above another advantage to having an electric forklift in your manufacturing or warehouse business is that it is quieter than other models. Plus you do not need to worry about storing fuel for the truck so that frees up more space within your business. The final reason as to why it is an advantage to have a forklift like this in your business is that it has fewer moving parts then many other types of forklift trucks and they tend to live a little longer as well. However there are disadvantages to be had from using such a vehicle in your business and these are as follows:-
1. As they are powered by huge heavy lead acid batteries they only last for around about 5 to 6 hours if constantly used. Although they are supposed to provide the truck with enough power to last for an 8 hour shift. The problems start to arise when these need charging. It takes 8 hours to charge each battery and then a further 8 hours when it needs to be allowed to cool down before it can be used. Unfortunately if you need to be using your electric forklift truck for 2 or 3 shifts at a time then you will need to buy additional batteries so that you will always have a set charging whilst the other ones are being used. So you will need to factor in an additional cost of between $1,000 and $2,000 for each additional battery on top of the cost of the truck itself. 2. As well as the time it takes for the batteries to charge you will also need to set up a battery charging station within your business. This station will need to be set up in a dry, well ventilated but temperature controlled area. Within this you will also need to set up a special crane which can then help you to change the batteries in the truck when required. 3. The final disadvantage to having an electric forklift truck is that they are not suitable for outdoor use. Certainly you should avoid at all costs using your truck outside especially when it is raining.
Pros
Cons
• No emissions
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Not for outdoor use
• Quiet
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Needs a smooth, flat surface
• No fuel cost
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More expensive
• No storage for gas or diesel fuels
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Battery charge area
• Rechargeable, changeable batteries
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Batteries need 8 hours to charge, 8 hours to cool before use
• Low cost per hour of operation
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Time consuming to change battery
Internal Analysis In the previous chapter, we have observed the external environment. In this chapter, we inspect the internal environment. We have attempted to conduct an internal analysis of RBL through SWOT analysis. The SWOT gives us a clear understanding of where RBL’s strengths and weaknesses lie. Examining RBLs strengths and weaknesses can give indications regarding what RBL is doing right and what still needs to be improved upon if they are to survive in the global market. We also explore
opportunities and assess current and future threats that may prove to be critical for future business success.
The SWOT analysis of Rahimafrooz The SWOT analysis of Rahimafrooz reveals the actual scenario and the competitiveness of Rahimafrooz Batteries Ltd in the market. Though there are large number of competitor exists in different areas but Rahimafrooz Batteries Ltd has some advantages over them. The SWOT analysis of Rahimafrooz Batteries Ltd is in the following: Strengths •
Wide range of product to satisfy a large number of consumers range.
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Competitive price through out the international arena.
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Own set up in India & Nepal.
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Outsized Production Capacity to meet the market demand both home and abroad.
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Efficient workforce to ensure the best quality as well as production.
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ISO 9001 & 14001 certified company.
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Local market Leadership with 54% SOM.
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Strong local Distribution network that ensures the proper supply of battery through out the whole world.
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Over 4 decades of battery manufacturing experience.
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Strong brand image and brand recognition that increases the Company’s value to the whole world
Weaknesses •
No lead reclamation facility.
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Lack of own Brand Image in export markets.
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Absence of a global brand.
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New product development.
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Technical know how.
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Product outlook is not up to the mark.
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Inconsistent product quality.
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Reduced battery life: ignore consumer preference.
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Inadequate sales force in RBL India operation.
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Lack of forecasting skill.
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Less control over primary raw material .(Lead)
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Dependency on few big dealers/importers for local & export markets.
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Lack of marketing communication along with the promotional activities that leads to a less sale.
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Inappropriate warranty management for local & India market.
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Declining brand equity & brand recall trend.
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Internal brand cannibalization.
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Growing & emerging markets in Asia.
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Battery market growing by 7%.
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Increasing price trend of Chinese products.
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Cash Incentive in Export.
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High Growth potential in Middle East, Asia & Africa.
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Duty Free access Canada, Thailand, China, Australia, New Zealand.
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International exposure by set up sales office in Dubai.
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Re-export facility from Dubai.
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Jebel-Ali facility to do sourcing, branding & re-exporting.
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FTA arrangement with more countries.
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Merger & acquisition of production facilities in overseas.
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Rural market (AP battery).
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Marine battery market.
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Penetration in CV segment.
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Increasing quality concerns from customers.
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Unstable LME.
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Trade barriers in overseas markets.
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Absence of brand registration in some Export markets.
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New competitors in the local market that gaining local market share.
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SD withdrawal.
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High Price inviting more competition from local & overseas.
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Entrance of major Global battery manufacturer in Bangladesh.
Opportunities
Threats
External Analysis
In the previous three chapters we have gained insight into the battery market as a whole and both the global automotive and IB market in detail. Since, we now have a fairly good understanding of the market. Now, we will analyze the market environment. This part depicts the external environment that will affect the global business of RBL. In this part, we have conducted a PESTLE analysis of the global battery market environment. First we glimpse the political factors like political instability, currency instability and nationalism that may affect RBL’s global business. Then we look at the economic and socio-cultural factors for different regions; Europe, North America, Asia and Africa. Next we discuss the technology and how though it has improved over the years; RBL still needs to improve their technological quality in order to meet international standards. We also discuss how the emerging fuel cell technology may be a future threat to the battery industry, especially for the forklift segments. After, we look at the legal factors that will may aid or obstruct RBLs entry into foreign markets. We examine the Free Trade Agreements (FTA) in different parts of the world, especially the ones that Bangladesh is involved in like: SAFTA, SAARC, etc. Lastly we glace at the environmental factors that may need to be considered like proper disposal, reuse and recycling of lead, which is the main raw material for batteries. This chapter will give a clear understanding about which external factors will most likely influence the battery market in the international arena. These factors need to be taken into consideration when decisions are made regarding RBLs global business strategy. Environmental assessment includes environmental scanning and continuous monitoring to keep abreast of variables around the world that are pertinent to the firm and that have the potential to shape its future by posing new opportunities and threats (Dersky, 2000). Political Factors: Political instability: Before entering any country, RBL must first look and its political stability. Even if a market may look very attractive from the economic view-point, if that market is not politically stable then it will not be a fruitful market for RBL to enter into. For example, Africa may seem like a very attractive market to enter for RBL to market its solar products. The country offers a wide untapped market with huge demand. However political instability in the region presents great risk to any investor in the country. The region is constantly plagued with political instability, fighting and war. These factors make all the other factors null and diminish the attractiveness of these markets. Currency instability:
The international markets are now constantly plagued with currency fluctuations. The current dip in the dollar has affected any company remotely related to international trading. RBL must keep currency fluctuations in mind when conducting business in international markets. It should take the help of certain tools like hedging, in order to reduce currency fluctuation risks. Nationalism: The home government may impose restrictive policies like import control, equity requirements, local content requirements, limitations on the repatriation of profits and so on (Dersky, 2000). India for example, has imposed imports controls in the form of anti-dumping taxes on Bangladeshi battery manufacturers in order to protect their domestic manufacturers. Before entering a foreign market, RBL must thoroughly examine their policies and attitude toward foreign companies. Economic Factors: Europe: GDP of Europe (PPP) is $ 13.06 trillion. The growth rate is 3.1%. Per capita income is US $ 29900. These data indicate that people in Europe is able to live above their need. So standard of living is high which shows that industry is booming. The booming industry explains the industrialization of that region. Where there is industrialization there must have demand of forklift. That means the demand of traction battery will be better than any other region. At the same time in this region mobile user is bit higher and therefore the BTS tower is available and that is why demand of stationary battery is also obtainable. North America: North American GDP (PPP) is $ 15,857 billion (2007) and per capita income is $ 35, 491. In that territory nominal GDP is $ 15,723 billion. From this scenario it is well clear that in this region people’s living standard is better. From this point of view in this region industry is expanding, communication system is well equipped. So in the battery industry perspective there is demand for huge amount of battery for forklift and in telecommunication sector there is demand for stationary battery. Asia: Asia’s average GDP is $ 8.7. this is very lower than Europe or North American territory which means in this region there is a lot of scope for developing. In this region there are some country which are developing like India, Bangladesh, Pakistan, Nepal etc and some countries like Japan, China are developed. So in Asia among the countries there are two divisions, one is developed countries and other one is developing countries. So these two divisions have two different scenarios. For developing
country like India the GDP (PPP) is $2.989 trillion and GDP per capita is $ 2700 which is also lower than any developed country, but India is in booming stage of their economy. On the other hand Japan is developed country and their GDP (PPP) is $ 4.29 trillion and GDP per capita $33600 (2007) which is clearly better than India. In this country their living standard is much higher than India or any other developing country and their industry has huge demand for forklift battery and telecom sector they demand for stationary battery. As a developed country Japan is always quality conscious and to do business they need quality product. Africa The gross domestic product (GDP) in Africa is forecast to rise 5.9 percent in 2007 and 5.7 percent in 2008, according to a report from the African Development Bank (ADB) and the Organization for Economic Cooperation and Development (OECD) Development Center. This is a region where industry booming is lower than any region of the world. Purchasing power is very low and on the other hand there are lots of ethnic and tribal exists who always fights among themselves. Corruption level is higher so to do business in this region tougher than anywhere. Future demand analysis of traction battery In the market research for traction battery, a survey has been conducted among 286 numbers of companies in three different industries, those are as follows: •
Pharmaceutical
•
Food
•
Tobacco
The market survey includes some other industries such as: •
Textile
•
Rolling & Spinning
•
Color manufacturing
The survey result and statistics are shown bellow: Total Number of Companies
286
100%
Pharmaceutical
127
44.40%
Food
107
37.42%
Tobacco
8
2.79%
Other
44
15.39%
Survey Result Statistics
Tobacco, Other, 44 8
Pharmac eutical, 127
Food, 107
Graphical representation of the information
Forklift User Among the total 286 companies that has been taken for survey, 107 companies uses forklifts for material handling, 86 companies do not use forklifts and no information was could not be collected from the rest of the others. There are several reasons for not using the forklifts for those companies which do not use forklifts. First of all most of the companies are not financially strong to afford a forklift for material handling. Then, some of the companies are not conscious enough to use forklifts. In fact some of them think, manually they can handle materials which would cost them less than that of using a forklift. The data that has been collected are shown bellow:
Total Number of Companies
286
100%
Forklift User
107
37.41%
Do not use Forklift
86
30.07%
No information
93
32.52%
Forklift user Do not use forklift No information
Graphical representation of the information Pharmaceutical Industry In the pharmaceutical industry there are in total 127 companies that have been undertaken for survey. Among those 127 companies, 33 companies use only battery operated forklifts which are in total 104. 9 companies use both battery and other energy operated forklifts. The total number of forklifts that use other energy type is 23. 34 companies do not use any kind of forklifts. And 60 companies couldn’t provide any information. Pharmaceutical Industry
Number
Total Number of Companies
127
100%
Forklifts
AForklift User(Battery)
33
25.98%
104
Forklift User(Both)
9
7.09%
27(Other)
Do not use Forklift
34
26.78%
No information
60
47.24%
Pharmaceutical Industry Statistics
of
24% 44% 7%
Forklift User(Battery) Forklift User(Both) Do not use Forklift No information
25% Graphical Representation of the data Food Industry In the Food manufacturing and packaging industry there are in total 107 companies that have been undertaken for survey. Among those 107 companies, 15 companies use only battery operated forklifts which are in total 57. 48 companies do not use any kind of forklifts. And 44 companies couldn’t provide any information.
Food Industry Total Number of Companies
Number Forklifts
107 100%
Forklift User(Battery)
15
14.02%
Do not use Forklift
48
44.86%
No information
44
41.12%
Food Industry Statistics
57
of
14% Forklift User(Battery) Do not use Forklift No information
41%
45%
Graphical Representation of the data Tobacco Industry In the Tobacco industry there are in 8 companies that have been undertaken for survey. Most of the companies use Both Battery and other fuel operated Forklifts. Companies use both and only 2 companies use battery operated Forklifts only. Total battery operated forklifts are 28 and others are 17.
Tobacco Industry
Number
Total Number of Companies
8
100%
Forklifts
Forklift User(Battery)
8
100%
28
Forklift User(Both)
6
75%
17
Do not use Forklift
0
0%
No information
0
0%
Tobacco Industry Statistics
of
0% Forklift User(Battery) Forklift User(Both) Do not use Forklift No information
100% Graphical Representation of the data Supplementary Industry According to the Forklift Supplier information there is some other companies consisting of different industries such as Textile, Garments, Color manufacturer, Packaging, Cotton mill, Jute mill etc. There are 44 companies in total and the total numbers of forklifts are 72.
Supplementary Industry
Number
Total Number of Companies
44
100%
Forklifts
Forklift User(Battery)
44
100%
72
Do not use Forklift
0
0%
No information
0
0%
Forklift User(Both)
of
Tobacco Industry Statistics
0% Forklift User(Battery) Forklift User(Both) Do not use Forklift No information
100% Supplier of Forklifts According to the market survey that was conducted to find out the total market size as well as the market share of different companies, there are in total 350 battery operated forklifts are supplied in the country in different industries. Among those CEPAB has supplied 82 forklifts which are 23.26% of the overall market. TCM has supplied 18 forklifts, that is 5.14% of the total market share. Mark Asia has supplied 50 forklifts that are 14.29% of the total market share. The rest of the forklifts are supplied by some other suppliers which are of other companies such as Toyota, Nissan, Komatsu, and Hyundai. In some other case some of the forklift user has imported their forklifts without the help of the importer instead they imported by themselves. This information could not collect because of several issues. So, based on the previous data and the assumption that report has came up with a total number of 350. Some of the companies have stopped using battery operated forklifts because several problems. Those are not included in this report. Finally, we can come up with a result that the total number of forklifts that are in operation right now is 350.
Supplier Information Total Number Forklifts
350
100%
CEPAB
82
23.26%
TCM
18
5.14%
Mark Asia
50
14.29%
Other + forecast
200
57.13%
Supplier of forklifts
CEPAB TCM Mark Asia Other
Graphical representation of the Supplier Information From the above data we can see that there are in total 350 Battery operated forklifts in operation right now. Battery Sales Per year Now to find out the total sales in a year we need to know the battery life. •
Warranty – 1 year
•
Average life time of battery – 3 year. Total number of Forklifts
Total number of sales per year= Total battery life time
Total number of sales per year= 350/3=116.67 units
The number of battery sales is increasing day by day as more and more company is using battery operated forklifts.
Recommended Strategy
This research shows that there is excellent opportunity and prospect for Rahimafrooz to get into supplying forklift traction batteries. It offers not only the possibility of increasing revenue and profitability but also a means of diversification of its product lines and services offered. This ultimately will minimize the company’s overall operating risk as well. The following strategies are my recommendations to break-in to this market and grab market shares from existing competitors. Target Market Strategy The first step of marketing strategy is target marketing. Traction battery target market can be divided into two major categories: 1. Local market 2. Export market The industrial batteries local market includes various segments and individual segment has different requirements. Local market includesIndividual customer: Rahimafrooz Batteries Ltd. would sale traction batteries directly to the individual customer if any order is in place. For this the company needs to communicate with the companies more frequently and asses their needs. As a result of this the order of the battery would increase rapidly. Institutions: Institutions are another large segment of local market. Rahimafrooz should participate more and more on tender for getting order of traction batteries from various institutions. Dealers and Resellers: The large market segment of traction batteries are dealers and Resellers of Electric forklifts. For this the company should contact to the dealers directly to supply the battery. According to the market survey it is found that the new forklifts can be import without battery. In that case Battery would be supplied from Rahimafrooz. As result of this battery sale would increase rapidly and if the user needs any battery in the future they can contact directly to Rahimafrooz. It would gradually decrease the promotional cost as well. Product Strategy Packaging The features of the product and their utilities should be communicated through the packaging. For the current packaging, an attention grabbing sticker should state the precise warranty plan. A new packaging design should be implemented. In this design: •
List of features and their utilities should be given.
•
Replacement and warranty should be mentioned in the front.
•
Major features can be mentioned in the front in such a way that it grabs attention of a customer.
•
Entire packaging should be done in English only. However, the caution sign on top should remain in Bangla to ensure that everyone understands. Its English translation should be printed next to it. Usage of English gives an impression of exclusivity or high quality to many customers.
•
Along with the guarantee card, a leaflet should be provided to the customer, which will state the features and benefits of Volta MF on one side and the proper procedure for handling and using the battery on the other. Other information like numbers for after sales service and battery disposal can be highlighted here.
Following is a sample of the way information can be displayed on the package for customer Features 18 month free replacement 24 month limited warranty Maintenance free Charge Indicator EMT Technology Calcium-calcium battery
Delivered filled and charged
Countrywide after sales service
Benefits Rahimafrooz gives you the longest replacement offer in the market—because it lasts longer. With a 2 year warranty you can rest easier for a much longer period of time. No more refilling! Saves time from your busy schedule and enjoy more convenience. Allows you to easily check the battery’s charge yourself at a glance. Ensures longer battery life by reducing shedding. Ensures longer battery plate life so the battery lasts longer. Batteries are ready to use. There’s no need to fill electrolyte into the battery before installing reducing installation time Enjoy free after sales service from any one of our outlets.
After-sales service: Leaflets will provide to customers. There would be a facility called customer helpline telephone number which they can use to call if they need a battery replacement or simply for a battery check up. At present customers can call a certain number of RBL to dispose their batteries. Then, Rahimafrooz collects the battery from the customer and recycles it. This service should be properly promoted to customers at POS and during the sales of the battery. If the call centre is introduced the customer
won’t have to face the hassle. They would directly communicate with the RBL. As a result of this service would be enhanced. Warranty/replacement Free replacement should be extended to 18 months. Also, the 24 month limited warranty should have a simpler pro rata basis. For example, if the battery is at fault after surpassing the replacement warranty period by three months then the customer will get a high discount on the retail price for the next battery he or she purchases from the company. If the battery is at fault within the 22 nd and 24th month then a lower discount will be provided to the customer on the purchase of the next battery. People Strategy Employees RBL should hire a 2 person field team who will be given proper training and proper equipments. They will directly communicate with the customer of Traction Battery. They will contact different dealers and retailers and visit 2 to 3 outlets everyday. Every dealer of battery operated Forklifts will be visited at least once in every three months. During their first visit, they will present the features and details of Rahimafrooz Traction Battery to the dealer and his subordinates. Through flashy animated presentations, it has to be communicated what Rahimafrooz Traction Battery is and why it is better. They will discuss about problems, current situation and ask for comments and advice from the dealer. During revisits, problems should be identified and given solution to. The field team will inspect and evaluate the condition of the companies, battery storage methods, machines used for after sales service, skills and quality of the workers and also the overall performance and looks of the store. These people will also maintain a separate database on Battery sales, usage, recall rate, common problems and other necessary information for each store. This first visit of the field time to the dealers will include a free Rahimafrooz t-shirt to the dealer to make the next visit welcoming. The data collected will then be periodically compared with the data at RBL and RDL to check for compliancy and problems. User Every Traction Battery users need to be properly educated about the technical details of batteries, battery usage and maintenance. This can mainly be done via the field team. Also, small briefing sessions can be arranged every 2 weeks with 10 to 15 companies. Each company would bring one worker as a representative of the company. One or two major prizewinners from the scratch card promotion should be included in each discussion. In the briefing session, the users will again be taught about Traction Batteries and its maintenance. The scratch card promotion can be indirectly promoted here among the resellers by referring to the present winners.
Promotion Strategy Billboard At the beginning of the promotion 4 or 5 billboards at major points of the industrial area can be used for 2 to 4 weeks. All the billboards will go up on the RECHARGE day. These billboards will be made in the shape of batteries. They will clearly display Rahimafrooz brand as well as the two unique advantages points: long lasting and more applications. The billboard will also display Rahimafrooz’s logo but comparatively in a smaller size. After the stated time, no billboard will be displayed. After 5/6 months the billboards can be put up again for another 4-8 weeks. Press ad Teaser ads can be put on three national dailies (24 column inch) for two consecutive days (Sunday & Monday). On Sunday’s teaser, the places of the billboards will also be named. Sunday will be the MAINTENENCE day. The final ad will also go on Monday. The final ad will communicate the Volta brand name, Rahimafrooz brand name and major features and utilities of the product. Banners Banners bearing Rahimafrooz Traction Battery logo and the battery picture can be put up at different dealers & Supplier of battery operated forklifts, garages, workshops, service centers. A sticker describing all the points above can be pasted on Each and every Forklift that runs on Rahimafrooz Traction Battery. This will create a strong brand image among the user as well as the potential customer of the Traction Battery. T-shirts, caps T-shirts and caps bearing Rahimafrooz Traction Battery logo can be distributed among garage mechanics, employees at Traction battery using companies and retailer shops etc.
CSR Activities Battery operated Forklifts have several advantages, such as: No emissions, Quiet, No fuel cost, Rechargeable, changeable batteries, Low cost per hour of operation. These advantages can be represents to increase the social awareness to save our planet. This will also increase the brand image of the company. RBL should try to emphasis on their battery disposal and recycling facility as a part of their CSR. Good relationships with the media may prove to be useful as it can do passive promotion for the product like it happened.
Sales Process Strategy Change in sales process can be obtained through the field team. They will monitor the sales process of the inspecting outlet and advice the owner in ways to improve the process i.e. showing the battery packaging, comparing different batteries and their features etc. They should also be advised not to reduce their margin for Rahimafrooz Traction Battery since it is a premium product and most companies are willing to pay the MRP. Battery usage procedure of the Battery operated Forklift owners can be corrected and improved by the leaflets that are provided. Battery operated Forklifts Supplier should be advised to teach the usage of charge indicator at the time of sales. Along with the revised Sales process strategy, a strong distributional strategy can foster the sales. Push strategy can be best fit for this kind of product sales. Other Strategy A. Improving Traction battery quality to global standards The Traction battery quality in Rahimafrooz Batteries Ltd. is not up to global standards that’s why it’s hard for RBL to capture the market which is in the hand of the Europe and North American Traction Battery producer. Users of the Traction Battery are importing Battery where as the can buy from their own country. It could improve its Traction battery quality through enriching the technical know how of the production workforce by sending them in training programs in home & abroad. It could also go for battery plant acquisition in countries like India, Thailand and China to increase the production capacity as well as the quality within 2017. B. Forming five year short term goal Rahimafrooz Batteries Ltd. has a vision of becoming 1 billion dollar company by 2017. To achieve that target it could form five year short term goal which is revisable each year in five years duration. It could form another five year short term goal up to 2017 based on target achievement till 2012.
C. Liberal credit terms in the initial stage RBL should offer liberal credit terms during initial stage. For example: payment can be done within 18 months of purchasing the equipment. Although, this would increase the daily sales outstanding (DSO) for the company in the initial stage; sales will be enhanced and later credit terms can be tightened. This strategy will help the company to continue its operation in the long run. As a matter of fact the relationship with the customer would increase as more and more interactions are taking place in this process.
D. More focus on the promotional campaign One meaning of marketing is to inform the potential customer about the product and services that the company is going to serve. The only way to of doing this is by enhancing the promotion that is advertising. Currently a very little advertising is taking place in the selling process. More advertising can enhance the sales as well as the brand recognition to the customer. So, advertising and other promotional campaigns can be undertaken in the initial stage as well. E. Dedicated person for post sales communication To ensure the best use and the best customer feed back one dedicated person should be hired, who will ensure the regular customer data as well as the customer feed back. This will increase the customer loyalty; hence increase sales in the future. For this purpose a dedicated persons should be assigned for post sales communication incase any problem is faced. Some voluntary training program and presentation can also be done to educate/specific persons in the customer end about the traction battery, functionalities etc. Conclusion Rahimafrooz Batteries Ltd is the market leader of battery industry in Bangladesh. It holds overall 74% market share in the local battery market. Rahimafrooz Batteries Ltd. has two battery plants operating one in Nakhalpara and another one in Savar. As the new technologies are emerging day by day it’s creating huge opportunity for RBL to grab. Rahimafrooz Batteries Ltd. is giving much priority to export as a tool for organizational growth from 2005-06. As a part of this they should also emphasize on the local IB battery market by giving more concern on the Traction battery market. Not only it should concentrate more on the local market but also a more concern of exporting Traction battery is needed. Definitely this will increase the sales as well as revenue. As shown in the report the total Traction battery market is still untouched, the right time is now to grab the market which is still in the hand of the foreign import. A right set of strategy can be well enough to grab this opportunity. The local as well as global traction battery market is growing very fast as the increase of modern era along with modern technology and Rahimafrooz Batteries Ltd. needs to form proper planning to hold significant share of future Traction battery market taking into consideration Traction battery market projection for the upcoming years. Bibliography Books Bowen,J.T and chen,S.L(2001) the relationshop between customer lowelty and Customer satisfaction
astous,A.D And jecob,I.(2002) Understanding consumer reaction to preumbased promotional offerrs Gulitian , J.P (2000).Managing Quality cues for product –line pricing journal of product and Brand management astous,A.D And landreville,V(2003).an experemental investigation of Factors affecting customer perception of sales and promotion.
Sources Annual report Of “Rahimafrooz Batteries Ltd” in 2004 Annual report Of “Rahimafrooz Batteries Ltd” in 2005 Annual report Of “Rahimafrooz Batteries Ltd” in 2006 Annual report Of “Rahimafrooz Batteries Ltd” in 2007 Website: www.my Rahimafrooz .com