CHAPTER ONE
INTROUDUCTION
1.1     BACKGROUND OF THE STUDY
It is natural for any company that engages in buying and selling to use negotiation techniques in its buying strategies.
Negotiation is an important aspect of purchasing and supply. Negotiation in purchasing is the process, which provide a legitimate and ethical means for the buyer and the seller through give and take, or eliminate unjustified or unnecessary increment n cost.
It should not be construed as a means of stripping the trend or a fair profit or an opportunity for extracting unreasonable concession. In reliability the most successful negotiations are those which produce result to satisfy both side and which to provide the framework long-term mutually beneficial relationship. In my own understanding Negotiation is nothing but an act and science for arriving at common understanding through bargaining on the essential of contract in purchasing context.
Negotiation technique varies from one company to another depending on the type and policy of that company.
In most companies and organizations today materials are consideration as vital tools to the success operations.
The purchasing of materials take a lion share of the financial budget in a trading period almost 75% of the Asaba textile mill total expenditure goes on material procurement. This makes prompt negotiation a function of purchasing. This project work is a case study of Asaba tex Nigeria limited. I have chosen Asaba for two reasons.
First, it is a manifesting company and they have acquired a lot of knowledge about purchasing function secondly, so that I can critically examine how they carryout local and international negotiation practices in the company and its effect on profitability.
(ii)        HISTORICAL BACKGROUND
Asaba Textile mile was income prorated on June 18th 1964. The name of the company at that time was Midwest textile mile limited and was the brain child of the partnership of the Midwestern region government and continue card and company ltd of Hamburg, western Germany with 90% and 10% share holding respectively. The authorized and fully paid capital of the company is N2.5m.
Location. Asaba textile mile is situated at Asaba on the west bank of the legendary Rive Nigeria. The choice of the form as location of the mill was on double influenced by the fact of the being new river water is crucial to mills therefore this proximity to the river is a good insurance since public water supply is erratic. Locating the mill at Asaba.
Also ensured proximity to the bustling  town of Onitsha just across the river.
Onitsha has about the largest industrial market in the country.
Raw materials and spare parts for the mile machinery are usually available there. Quite importantly too, there is a large market for the dispose of finished textile product. Though incorporated in 1964, production did not start until 2nd October 1965.
Incidentally the disastrous Nigeria civil war started barely a year after this and the company was heavily damaged as a result of the ravages a cropping blow I its infancy. The period during which it had operated before the war broke out was far too short to establish a convenient system of production so that in reality it was faced with having to make a fresh start in 1970 when the war ended.
Saddled with burden of damaged infrastructure, shortage of water, capital and the resultant low out put, the company plodded on for thirteen years after  that with little to show for the share holders aspirations.
In those times production level was at an all – time low of about 4000 metres daily, and to survive we had to lean heavily on the Bendel state Government congresses. With the inception a new brand of directors under V. Okia – Anie however, administrative and operational strategy was over handed, a new energy injured, many forereaching decisions taken in chiding the agonizing one of pruning staff strength by 50% to reduce overheads.
Immediately production level increased from dismal ranges of 4000 meters daily, giving the company the impetus to short repaying most of their loans and subventions.
On 7th April 1987 a new board of directors under the chairmanship of it, COLEBOMA (rto) was sworn in to run the company. The high production level has been maintained so that today the mile Tums out between 10,000 – 12,000 meter daily. The buoyancy resulting from the production level has made it possible for the new board to reabsorb 140 previously rethreaded workers. The company looks at the further with great expectation hope and determination to keep the customers satisfied.
PRODUCTION PROCESSES
The mill is equipped with facilities for a full production circler. This means that the mill is capable of taking all production steps necessary to:
(1)    Spin raw cotton limit into yarn
(2)    We have the yarn to produce grey baft.
(3)    And consequently bleach engrave and print the grey baft into the finished product we see in the market.
There are four departments that handle start the production of those fine quality prints that the company is increasingly being noted for. The departments are.
(A)             Wearing:- In this department, the yarn that has been turned out by the spinning department is woven into grey baft by our export team of weavers the machine with which this process is carried out is know as pirn chancing hoom, of which the mill presently has over five hundred.
(B)              Engracing: Engracing the designs that have been chosen for particular prints into the grey baft is carried out by this department.
(C)              This is done by the use of copper rollers and screens though the company turns out its own design, the customers can as well bring forward their own specifications for engraving.
Finishing: This department processes the cloth with chemicals dyeing, printing and finishing and then making it into the attractive quality production level is encouraging and the incessant demand for the company’s product is an attestation to their high quality. This is a far – cry from the period of how production before 1983 when as we had said production as how as 4,000 meters daily and the company had to spend heavily on government publication Today we an able to say that things have definitely taken a tune for the better and we would like you to depart of that rejuvenation.