BUSINESS PERFORMANCE OF CO-OPERATIVE OIL MILLS - A MANAGEMENT APPRAISAL
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Date
2000
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University of Agricultural Sciences, Dharwad
Abstract
"India is the third-largest oil economy in the world. Indian vegetable oil industry undertakes number of activities ranging from kernel crushing to Vanaspati manufacturing. All the three sectors (co-operative, private and public) of this industry are hit with problems but the cooperative sector is the worst in its sufferings. Therefore business performance analysis of the co-operative oil mills is highly significant. Two oil mills, one each under large scale and medium scale, from the Gadag district were considered for the study. The primary data, for 1998-99 was collected through a pre-tested questionnaire while the secondary data, from 1994-95 to 1998-99, was collected from various records of the mills. Data were analysed using percentages, financial ratios and comparative rating methods. The study revealed that capital investment increased with size of the unit. The patterns for procurement of raw materials and marketing of finished products were similar in both mills. In processing costs, the fixed costs increased with increase in size of the unit while variable costs decreased with increased capacity utilization. The cost of carrying the inventory was influenced by quantity and type of inventory held by the unit. The benefit cost ratio of processing was 0.92 in the large scale unit and 1.35 in the large scale unit. The financial indicators revealed that the performance of medium scale unit was just satisfactory while that of large scale unit was far below the satisfactory limits. The problems faced by both the mills were identical (inadequate raw materials, infrastructural facilities and high processing costs) and severity of problem varied with units. Therefore, up-gradation of infrastructural facilities and implementation of strategies to strengthen raw material base, inventory management and financial management, coupled with policies to cut tax charges is necessary to improve the performance of co-operative oil mills. "
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No . of references 60