by There are some industries where two or more products come out of a single raw material which is equally important. These are referred to as joint products.
C.l.M.A. defines joint product as ‘Two or more products separated in the course of processing, each having a sufficiently high saleable value to merit recognition as a main product’.
According to T. Lang, Joint products means “Two-or more products separated in the course of the same processing operation, usually requiring further processing, each product being in such proportion that no single product can be designated as major product”.
In short, we can say, when two or more products of equal importance are simultaneously produced, then they are known as joint products.
Example:
In oil industry kerosene, gasoline, fuel oil, lubricants etc. are all produced from the same product, crude petroleum. They are of equal important; hence they are called joint products.
Meaning of By-Products:
Terminologically, a by-product is defined as “a product which is recovered incidentally from the material used in the manufacture of recognised main products, such a byproduct having either a net realisable value or a usable value which is relatively low in comparison with the saleable value of the main products. By-product may be further processed to increase their realisable value.”
Example:
(a) In soap-making industry—in the process of mixing and boiling ingredients many rejections take place. These rejections are collected for recovery as by-product.
(b) In coke ovens gas and tar are treated as by-products.
Distinctions between Joint Products and By-Products:
The following are points of distinctions:
(i) Joint products are of equal importance while by-products are of not equal importance as compared to that of the main products.
(ii) Joint products are produced simultaneously while by-products are produced incidentally.
(iii) Joint products are of more or less equal sales value while by products is of insignificant sales value.
Meaning of Co-Products:
Co-products are such products which are produced simultaneously with the main product but not necessarily from the same raw material.
Example:
In lumbering operations, it is possible to obtain oak, pine and walnut boards at the same time but from different trees.
The concept of joint product, by-product and co-product can be clarified by the following diagram:
M: Material
P1 & P2 = Process I and Process II
S = Split-off point
M1 = Material required for co-product A
M2 = Material required for co-product B
PA & PB = Process operation for Products A and B, respectively.
