Managing Director @ Cocoguru
CategoriesEmployees
by 5

What is the Salary?

Cocoguru has now grown to a 25 member organization, with immediate plans to increase the size to 35. When it started operations a year ago, it was about selecting whoever was willing to work with us, without regard to their skills and attitude. We were lucky to get a few good people, and few of them were groomed to be disciplined and develop a sense of ownership towards their roles. Now, with the base set, we will select more people selectively. In this post, I discuss about my experiences/frustrations with those selections and expectations from candidates. It is a mighty challenge to get good people to work for a startup especially in a rural area.

Preparation
In the job advertisements, we would mention the company name, address, working location, vacancy position, qualification, contact details, few times salary range also. Candidates will do well to observe the details carefully before applying. Rather what we see is that they apply blindly and then back out during later stages of selection process due to the very facts already disclosed to them. Good candidates visit the website, find out the company’s product offerings, perform background checks with references, sometimes with existing employees, visualise themselves working here for a long term.

The classic opening question
The job market has tilted so decisively towards sellers i.e. employees that they start calling the shots. This is how a conversation begins
Candidate – “Is this Cocoguru?” (Many times they don’t even bother to pronounce the name)
Me – “Yes, Sir”
Candidate – “You have advertised for a vacancy, right?”
Me – “Yeah, Right”
Candidate – In either a disinterested tone or rude tone, he then asks “What is the salary?”!!!
Me – Unhappy that the discussion is entirely off-direction, I ask “How much do you expect?”
There goes the conversion meaninglessly, each one trying to defend his ego and finally ending the conversation in a bitter manner. The classic opening question leads to an immediate conclusion.

In my theory, money is not everything as it is made out to be. It is merely a currency of “value”. Businesses should make good profits to reflect the value they create to its customers. Employees should take home good salaries for doing a valueable work for the company. Focus should be on creating value and money will follow.

In the above example we have seen how bad the conversation went. Instead it could be much more fruitful, if it went in the following lines
Candidate – “Hello, my name is Vaibhav, I saw your advertisement in today’s Suddi Bidugade, and I am interested in applying for the position of Sales Executive”.
Me – “Okay. Good. Tell us more about yourselves.”
Candidate – “I am from Sentyar, a B.Com graduate, having 6 years of experiece in Line Sales, last 4 years with Dash Marketing Agency selling ITC cigarretes in and around Puttur, Sullia and Subramanya.”
Me – “Why do you want to leave your present job, when it is so easy to sell cigarretes where demand is more than supply that too for a brand like ITC?”
Candidate – “I am liking my job as it is giving me opportunities to meet new people and I have developed good relations with a few retailers. I am only looking for better prospects.”
It would be blunder to say something like “Cigerrate is injurious to health, but Coconut Oil is good for health.” Because we know, you are looking to change for your own benefit and not for our benefit or that of people’s health at large. It will only prove that you are lier.
Me – “How do you plan to increase our sales?”
Candidate – “Sir, what is your present distribution setup? What places do you cover?”
Here, the candidate has not only given a overview of himself, but also has shown keen interest to know more about the company and the job he is going to do.

Brain Drain
Dakshina Kannada is a district that has so many bright talents and great educational institutions. So many top ranks in SSLC, PUC, CET etc go to them. Result percentage is also highest perennially in Dakshina Kannada. But they migrate to cities like Bangalore, Mumbai, Pune, Gulf and America. For all the talent they have, they are happy to work for someone outside. They don’t take risk to build a dream company at home or work for someone who wants to build such a company here (read Cocoguru ☺). It is right if suitable opportunities are not available here, but to squander them when available is bad. Only salaries are compared between 2 opportunities in Bangalore and here. Luxury of being at home with family, lesser travel to work place, staying away from hustle bustle busy city life and much lower cost of living are not considered in the decision making equation.

Influence
Influence from a well known person may help get a job in government sector, where performance and results don’t matter. Some candidates who are otherwise not worthy of the job, try to have influence in their selection. Will that influential person be responsible for what the candidate delivers in the job? No, rather he threatens us with negative consequences when he is not selected.

Fixed Salary, Routine Job
Since we have only seen the candidate once and at most had an interview. It will be difficult to determine his worth for the company. So, we place him on probation for a lesser salary, with the intention of increasing it to generous levels once he proves him selves and is made permanent. Even once he is permanent, there will be periodic Appraisals to review his performance and salaries will be increased inline with his performance. Sadly, the candidates don’t think long term, they only compare the salary during probation and assume it to be his lifelong income. Similarly, he has fixed his skill set to what he has acquired till now, without any aim of acquiring new skills on the job. He comes to office with the intention of performing routine jobs where Standard Operating Procedures (SOPs) are defined. Anything beyond the routine takes him completely off-guard.

Office Work vs Field Work
The number of enquiries for office work like Accounting far exceeds that of field work like Sales. Logically, hard work gets paid lot more than easy work. A sales man when he exceeds his targets gets more money in the form of commission. An accountant can at best get his annual bonus on superior performance. When we opened our factory last year for operations, about 50 ladies from nearby areas walked in looking for easy packing kind of jobs under a factory roof. They were willing to work for as low as 80 Rupees per day. The same people are not willing to work in a nearby farm for 250 Rupees a day. Not only about the nature of work but it is also a question of their prestige. They perceive Factory job to be a lot more prestigious than agricultural or household work.

CategoriesCoconut Oil
by 32

Difference between Roasted and Cold Pressed Coconut Oil

Our new factory at Kallarpe (Aryapu Village, Puttur) manufactures Roasted Coconut Oil. Our new customers have instantly liked it because of its enhanced aroma and taste. But our Old customers who have used Cold Pressed Coconut Oil manufactured from our old factory at Parladka (Puttur) have various kinds of doubts about it. I seek to clear those doubts here.

Cold Press Coconut Oil
Virgin Coconut Oil is many times referred to as Cold Press Coconut Oil. Virgin Coconut Oil is extracted from fresh Coconut. But, here we refer to oil extracted from Copra (dried coconut).

Copra with about 8% moisture is crushed as it is on Rotary Machine (Chuck/Ghana). Oil is filtered through sedimentation of solid particles for 7 days in settling tanks. The process is extremely simple and requires minimum capital investment.

The resulting oil has crystal clear transparent color, smells and tastes like Copra as it is. Many people like this as it is considered to be natural and local made product.

Roasted Coconut Oil
Copra is cut into small pieces and dried using hot air to about 5% moisture level. This copra is heated for about 1 hour on a multi stage steam-jacketed vessel for roasting. A bit of steam is also added to copra for cooking. This opens up the fat cells and helps in easy oil extraction. Oil is then filtered using Pressure Leaf Filter and Filter Press to remove sediments as and when oil is extracted. This process requires more capital investment for a Steam Boiler, Pipeline, Cooker with Agitator and Motor. Also has higher running cost in fuel for steam generation and power.

The resulting oil has a golden yellow color. It has a stronger smell and taste. It has just the same effect as what roasted Ground Nuts give.

During processing, the temperature of oil and oil cake rise up to 100 degrees, while in cold pressed it is only about 60 degrees. In the process the oil loses moisture and reduces the risk of going rancid. Copra gets sterilized as the bacteria and fungus die, which again prolongs shelf life.

At higher temperatures, triglycerides in other oils start breaking into free fatty acids causing rancidity. But Coconut Oil being mostly Saturated Fat and is quite stable. So, roasting does not deteriorate the quality of oil.

Hair Oil manufacturers prefer Roasted Oil for its stronger smell and longer shelf life. It has a 5% premium in the bulk oil market over Cold Pressed variety. But we are selling at the same price to consumers now. It is something new to them here in Dakshina Kannada market and not yet fully accepted. We have been working hard in educating them about this new variety.

Despite so much of difference they are still the same i.e. Coconut Oil. Both of them are made from same quality of copra, they have the same chemical composition, both have the same miraculous health benefits of coconut oil.

Download Write up of Roasted Coconut Oil FAQ

CategoriesTaxation
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Letter for Revision of VAT Rates

This is the letter that we submitted to the Industry Chamber and hence to the Government of Karnataka to clear many of the anomalies in Value Added Tax for Coconut Oil in Karnataka. Majority of these issues are brought out in an earlier post.

To,

The President
Puttur Chamber of Commerce and Industry

Subject :- Revision of Value Added Tax rates for Coconut Oil as Edible Oil

Respected Sir,

With the Union budget and the State budget coming up shortly. As part of the Coconut Oil Industry, we request the Government to

  • Reduce the Value Added Tax rates for Coconut Oil from present levels (5%)
  • Consider coconut oil sold in all quantities (above/below 200 gms) as for edible purpose and apply same rate (instead of 5% and 13.5%)

The following are the points considered to arrive at the above conclusion

  • Coconut Oil is a prime cooking oil not only in Kerala but also in coastal Karnataka.
  • Neighboring states of Kerala and Tamil Nadu don’t have any taxes for Coconut Oil. While in Karnataka VAT is 5% for quantity above 200 grams and 13.5% for quantity equal to and below 200 grams.
  • Under such high tax regime, business that pay taxes can’t compete with businesses that don’t pay taxes. So the market is flooded with adulterated and lower quality products.
  • Various researches have shown that Coconut Oil is good for heart and health, so it should be promoted for use in cooking.
  • Since the price of coconut oil is higher, other edible oils such as palm oil, sunflower oil and soybean oil are being imported without any customs duty and is becoming a threat to indigenous coconut industries and farmers.
  • While other edible oils are trading with lesser taxes, coconut oil with higher taxes is not having a level playing field.
  • Weaker sections of the society who earn daily wages and have to spend for their daily food prefer to buy their cooking oil in smaller quantities like 50 ml, 100 ml and 200 ml. These are now taxed at a whopping 13.5%!
  • Prices of the essential commodities like coconut oil and coconuts have doubled over last one year and is becoming less affordable to majority i.e. middle and lower class consumers.
  • We manufacture coconut oil for edible purpose, we follow the Prevention of Food Adulteration guidelines and have obtained Edible Oil Packing license for the same. But the products we sell attract taxes that are meant for cosmetic items and not edible items.
  • Being an essential commodity, the market is extremely price sensitive and any reduction in taxes will benefit the farmers and lower class consumers tremendously.

Request you to kindly communicate the matter to the respective government departments for taking necessary steps and actions.

Thanking You,

Yours faithfully,

For Cocoguru Coconut Industries Pvt. Ltd.

B. Keshava Ram

Managing Director

Update on 25th February 2011 – Karnataka Government hikes tax rates for goods presently taxed at 13.5% to 14%

Update on 1st August 2012 – Rate is again hiked from 14% to 14.5% with effect from August 1st 2012 to July 31st 2013

CategoriesCoconut Oil
by 2

Beware of Vanaspati, Margarine, Partially Hydrogenated Oils and Trans fats

Edible Oils are in 3 forms on the basis of processing viz. Crude Oil, Refined Oil and Vanaspati. The uninitiated, based on the terms used, will perceive

  • Crude oil is natural and not yet fit for consumption
  • Refined oil is improved and made perfect for consumption
  • Vanaspati, in Sanskrit means ‘lord of forest’, should be very healthy

This is where consumers are misguided by the names and their literal meanings. The fact though is

  • Crude Oil that is just filtered after extracting oil from the oil seed is the healthiest. Unrefined oils still have healthy bioactive components, Vitamin E, flavour and aroma.
  • Refined Oil is highly processed with the use of chemicals and heat to just retain the oil. Even oils extracted from lower quality oil seed can be refined. So, refined oil though pure is not as healthy as corresponding crude/unrefined oil.
  • Vanaspati is formed by partial hydrogenation of refined vegetable oil is extremely harmful. They have Trans fats which are formed as a by product of hydrogenation.

In India, of the total 13 million tons of edible oil consumed, 10% is in the form of Vanaspati and 45% each in refined and unrefined form. Doctors and Health Departments warn consumers against intake of saturated fats, but the real culprit for all the heart problems and obesity are trans fats. Chemical analysis of trans fats gives a logical reason why trans-fats are harmful.

Chemistry of Fats
Fatty acids are characterized as either saturated or unsaturated based on the presence of double bonds in its structure. If the molecule contains no double bonds, it is said to be saturated; otherwise, it is unsaturated to some degree. A saturated fat has no double bonds, has the maximum number of hydrogens bonded to the carbons, and therefore is “saturated” with hydrogen atoms. The more double bonds in the fatty acid the more vulnerable it is to rancidity, as free radicals attack double bonds.

In most naturally occurring unsaturated fatty acids (and all saturated fatty acids), the hydrogen atoms are on the same side of the double bonds of the carbon chain (cis configuration — from the Latin, meaning “on the same side”). However, partial hydrogenation reconfigures most of the double bonds that do not become chemically saturated, twisting them so that the hydrogen atoms end up on different sides of the chain. This type of configuration is called trans, from the Latin, meaning “across.” The trans conformation is the lower energy form, and is favored when catalytically equilibriated as a side reaction in hydrogenation.

The trans configuration is straighter, while the cis configuration is noticeably kinked. Trans fats have a much higher melting point (45 °C), due to the ability of the trans molecules to pack more tightly, forming a solid that is more difficult to break apart. This notably means that it is a solid at human body temperatures (37 °C).

In essence, hydrogenated oil/trans fats are stable making the food products last longer and are solids at body temperature making it harder to digest.

Why Hydrogenate?
Hydrogenated oils are more stable than corresponding natural oils with unsaturated fats. Saturated fats are mostly found in animal sources (Butter, Ghee etc) which are scarce and hence expensive. Oils from vegetable sources are mostly unsaturated, abundant and less expensive. So, partial hydrogenation of less expensive unsaturated fats from vegetable sources is an attractive commercial proposition. They are not only stable and make the fried food product last longer but also adds to the taste. That is why we find widespread use in commercial cooking in Breads, Cookies, Cream Biscuits, Sweets, fried snacks, chocolates and ice creams.

Health Risks
The primary health risk identified for trans fat consumption is an elevated risk of coronary heart disease. The reason is trans fat increases the level of LDL or bad cholesterol and decreases HDL or good cholesterol. Other ill-effects are Alzheimer’s disease, Cancer, Diabetes, Obesity, Liver dysfunction and infertility in women.

Prevention of Food Adulteration Act specifies that the melting point of Vanaspati be strictly less than 41 °C. That means manufactures must ensure that hydrogenation is stopped before melting point reaches that point. Also, the labels in packed food products must show the amount of trans fats in the food sample. ITC, Britannia and the likes who are branded manufacturers of such food products clearly mention that Trans fats are bad for health just like Cigarette packs mention ‘Smoking is injurious to health’.

It is highly advised that consumers avoid all commercially prepared foods (Bakeries, Hotels and Packed foods) to the extent possible. One should also carefully read the labels for its ingredients and nutrition values. Food items containing Edible Vegetable Fat or having Trans fats value more than 2% should be avoided.

Sources – http://en.wikipedia.org/wiki/Trans_fat

CategoriesPacking
by 0

Dimensions of the most economical Carton Box

Problem Statement – To economically design a carton box to pack 20 half litre pouches

Regular Slotted Carton
Carton box is formed from regular slotted carton (RSC). The image shows how a cardboard is cut to form a carton box.

Solution

If l is the length, b the breadth and h the height of a formed carton box, then the area of the cardboard shown above is 2 * (l + b) * (b + h). Cost of the carton box is directly proportional to the area of the card board used. So, the problem boils down to reducing the area of cardboard for a given volume of carton box.

Minimise 2 * (l + b) * (b + h), given l * b * h = V, a constant

Ideally, the surface area of any cuboid is 2*(l*b + b*h + l*h), but there is an extra 2b2 area in the figure. That extra area becomes the inside flaps during forming of carton box. It gives additional strength to carry load inside the carton box. Also, in order to avoid that area, the card board has to be cut into a more complex shape. With that area, cutting the card board is a simple i.e. a rectangle of length 2*(l + b) and breadth (b + h).

We know that, the cuboid with minimum surface area for a given volume is a ‘cube’. But that is not the case here as there is extra 2b2 area.

Let F(l, b, h) = (l + b) * (b + h) = lb + lh + b2 + bh       Ignore the factor 2 for time being

To eliminate factor ‘l’ from the expression, substitute l = V/bh     (Since lbh = V)

F(b,h) = V/h + V/b + b2 + bh

Differentiate partially w.r.t. ‘h’,   Fh(b,h) = -V/h2 + b

Equating to zero, we get, b = V/ h2

Substituting for V = lbh, we get, b = lbh/h2 or l = h.

Rewriting the problem, by substituting l = h, we get,

V = bh2

Area = 2 * (h + b)2

(h + b)2 is minimum when (h + b) is minimum, since (h+b) can’t get negative.

Minimise (h + b), given bh2 = V

Let, F(b,h) = h + b

We can eliminate the variable b by substituting for b = V/h2

F(h) = h + V/ h2

On differentiation, F’(h) = 1 – 2V/h3

Equating to zero, we get, h3 = 2V or h = (2V)1/3

Now, b = V/h2 or b = (V/4)1/3

For optimal solution, l = (2V)1/3, b = (V/4)1/3 and h = (2V)1/3

In our case of 500 ml pouches, though the volume of coconut oil is 10 litres, about 25% allowance should be given to accommodate the pouch film, and the pouch though flexible is not a perfect fluid to occupy all the space inside the box. So, the volume of carton box required is 12.5 litres or 12500 cubic cms. So, the dimensions of carton box area l = 29.24 cms, b = 14.62 cms and h = 29.24 cms for V = 12500.


Comparison
At present, we are using the standard sized carton box for both half litre and one litre pouches. We don’t have any other option now as our order quantities are small.

l = 32, b = 19 and h = 21, V = 12768 cm3 and A = 4080 cm2

For V = 12768, with minima solution, we have just arrived, l = 29.45, b = 14.72, h = 29.45 A = 3902 cm2

Or the ideal solution is 4.35% better. It may look insignificant but carton box is a packing raw material with repeated use and large quantity. So, it can result in significant cost savings. At Cocoguru, we examine each of these items for its costs and try and minimise it without compromising on customer value.

Cutting Costs is not about Cutting Corners but about careful Value Engineering.