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Case of Indian Jaggery Industry: Bhagirathi Gur Manufacturers

Journal of Rural and Industrial Development

Volume 1 Issue 1

Published: 2013
Author(s) Name: Amit Kumar Dwivedi | Author(s) Affiliation: Assistant Professor, Entrepreneurship Development Institute of India, Gandhinagar, Gujarat. India
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A Quality conscious Gur (Jaggery) Manufacturer Mr. Harivansh Bahgat, owner manager of Bhagirathi Gur Manufacturers (BGM), is very much worried about the costing of his four main products, manufactured at BGM. This is a family owned business which has sustained till the third generation of Mr. Harivansh. BHM has earned its name and reputation in the Jaggery manufacturing and allied products in Eastern Uttar-Pradesh and Western Bihar. Also, this group is recognized for its quality and timely delivery in the region. In recent times, the Eastern Uttar-Pradesh has become famous for Jaggery production, and so several Gur manufacturing units have been established. In the region more than 50 clusters are in working condition, and in turn a competitive scenario has emerged. Currently, BGM is producing four products Jaggery –Block, Jaggery-Powder, Jaggery Syrup and Jaggery-Candy. All these products have a common raw-material of Jaggery which is easily available in the north-eastern part of Uttar-Pradesh. BGM is using traditional method of production and costing the products. They keep direct material, expenses and labour to calculate direct cost of products and then add equal amount of indirect cost to each product. According to BGM per Kg. cost of products are Rs. 117.75, Rs. 113.37, Rs. 91.26 and Rs. 174.12 for Jaggery-Block, Jaggery-Powder, Jaggery- Syrup, and Jaggery Candy respectively. Although BGM produces all four products regularly, Jaggery-Block is the most popular product with a sound customer base. This year due to huge supply from other Gur Manufacturers in the local market the prices have gone down which is a matter of weighty concern for BGM management. BGM is producing Jaggery-Blocks at Rs. 117.75 and charge 15% profit approximates (Cost plus profit) which comes out around Rs. 141.00. Currently market price of Jaggery Block is varied from Rs. 120.00 to Rs. 125.00, which is not affordable by BGM, since they have a cost of Rs. 117.75 per Kg.

Keywords: Rural Industry, Gur Manufacturing Units, Activity Based Costing and Cost Management Systems

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