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OVERVIEW OF INDUSTRY AS A WHOLE
India is the eighth largest producer of crude steel in the world, accounting for 3.37% of the global steel production in 2005. India‟s finished carbon steel production grew to reach an estimated 42.63mmt in 2005-06; primary producers alone contributed about 38% whereas secondary producers contributed the rest. With reference in changes in economy Indian steel industry is poised for massive expansion. Dramatic consumption growth over the last few years has stimulated enormous expansion plans ,facilitated by a relatively unexploited iron ore raw material base. India is now being hailed as the new China, where crude steel production soared from less than 100m tonnes in 1995 to over 400m tonnes in 2006.This report focuses on detailed study about the Indian Steel Industry. Steel became… an integral part of development. It discusses basic steel manufacturing processes like Blast Furnace and, Electric arc Furnace, industry value chain with a special reference to major raw material trends and price trends of steel products. Demand –supply dynamics has been discussed along with key growth drivers and Export-Import scenario. It also talks about Issues & challenges of the steel industry, mergers and acquisitions, government policies and regulations. Top 10 Leading Players in steel Industry have been profiled namely Steel Authority of India (SAIL), Tata Steel, ESSAR Steel and JSW Steel in this report and analyzed on the basis of financial and operational performance and compares their Competitive Positioning along with future outlook in the light of increasing trend in investments in the domestic industry .Steel Industry in India is on an upswing because of the strong global and domestic demand. India's rapid economic growth and soaring demand by sectors like infrastructure, real estate and automobiles ,at home and abroad, has put Indian steel industry on the global map. According to the latest report by International Iron and Steel Institute (IISI), India is the seventh largest steel producer in the world. With reference to development which revised Indian infrastructure, the origin of the modern Indian steel industry can be traced back to 1953 when a contract for the construction of an integrated steelworks in Rourkela, Orissa was signed between the Indian government and the German companies Fried Krupp und Demag AG. The initial plan was an annual capacity of 500,000 tonnes, but this was subsequently raised to 1 million tonnes. The capacity of Rourkela Steel Plant (RSP), which belongs to the SAIL (Steel Authority
of India Ltd.) group, is presently about 2 million tonnes. At a very early stage the former USSR and a British consortium also showed an interest in establishing a modern steel industry in India. This resulted in the Soviet-aided building of a steel mill with a capacity of 1 million tonnes in Bhilai and the British-backed construction in Durgapur of a foundry which also has a million tonne capacity.The Indian steel industry is organized in three categories i.e., main producers, other major producers and the secondary producers. The main producers and other major producers have integrated steel making facility with plant capacities over 0.5 mT and utilize iron ore and coal/gas for production of steel. The main producers are Tata Steel, SAIL, and RINL, while the other major producers are ESSAR, BSLAT and JVSL. The secondary sector is dBSLersed and consists of: (1) Backward linkage from about 120 sponge iron producers that use iron ore and non-coking coal, providing feedstock for steel producers; (2) Approximately 650 mini blast furnaces, electric arc furnaces, induction furnaces and energy optimizing furnaces that use iron ore, sponge iron and melting scrap to produce steel; and (3) Forward linkage with about 1,200 re-rollers that roll out semis into finished steel products for consumer use.
Structural Weaknesses of Indian Steel Industry
Although India has modernized its steelmaking considerably, however, nearly 6% of its crude steel is still produced using the outdated open-hearth process. Labour productivity in India is still very low. According to an estimate crude steel output at the biggest Indian steelmaker is roughly 144 tonnes per worker per year, whereas in Western Europe the figure is around 600 tonnes.
India is deficient in raw materials required by the steel industry. Iron ore deposits are finite and there are problems in mining sufficient amounts of it. India's hard coal deposits are of low quality. Insufficient freight capacity and transport infrastructure impediments too hamper the growth of Indian steel industry.
Strengths of Indian Steel Industry
Low labour wage rates Abundance of quality manpower Mature production base Positive stimuli from construction industry Booming automobile industry
Outlook The outlook for Indian steel industry is very bright. India's lower wages and favourable energy prices will continue to promise substantial cost advantages compared to production facilities in (Western) Europe or the US. It since industry players are engaged in an unfettered rush for scale. This is evident from the recent acquisition of Corus by Tata. The deployment of modern production systems is also enabling Indian steel companies to improve the quality of their steel products and thus enhance their export prospects.
Steel Authority of India Limited (SAIL) is the leading steel-making company in India. It is a fully integrated iron and steel maker, producing both basic and special steels for domestic construction, engineering, power, railway, Auto motive and defense industries and for sale in export markets. During struggle for independence, Pt. Jawaharlal Nehru, our first Prime Minister, had a very clear vision about the role of Steel in the development of our country. Although TATA Iron &Steel Company (TISCO) has been establishment in 1907 marking the beginning of Indian Steel Industry followed by Indian Steel Co. (1918), they were too small to meet the development requirements of a big country like ours. Therefore, in the 1st Industrial Policy Resolution of the Govt., soon after independence, Govt. decided to establish Steel Plants in Public Sector. However, work could be started at fast pace only in 1954, when Hindustan Steel Ltd., was formed and three Steel Plants of 1 MT capacity each, were established with provision of further expansion at Bokaro, Rourkela and Durgapur with assistance from USSR, West Germany and U.K. respectively. To improve the functioning of Steel Industry, Govt. decided to form a holding company during 1972, which was named as Steel Authority of India Ltd., (SAIL) and the same was incorporated on January 24, 1973, with an authorized capital of Rs.2000 crores. SAIL was formed by registration of a company under the companies Act and not by the Act of Parliament. Govt., decided to abandon the holding company concept in 1978 and a bill was presented to the LokSabha. Accordingly, SAIL was again recognized in the following manner. Hindustan Steel Ltd., Bokaro Steel Ltd., Salem Steel Ltd., SAIL International Ltd.,
BhilaiBSLat Ltd., Rourkela BSLat Ltd., DurgapurBSLat Ltd., wholly owned subsidiaries of SAIL merged into it and started functioning as Units of SAIL. MECON, HSCL and NMDC become independent Companies and started under Ministry of Steel. However, Kiriburu and Meghatuburu Iron Ore Mines were attached with BSL as their Captive Mines.
Bharat Refectories Ltd. also became independent under the Ministry of Steel and refractory units also came under them.
Thus, SAIL, at present, is having capacity of 12 MT of crude steel through its four integrated Steel Plants, at Bokaro, Bhilai, Durgapur and Rourkela. Two special steel
plants at Durgapur and Salem produce a wide range of alloy and special steels. Marketing of the products from these plants is done through a country wide distribution network consisting of a chain of Stock Yards and distribution network.
SAIL today is one of the largest industrial entities in India. Its strength has been the diversified range of quality steel products catering to the domestic as well as the Export markets and a large pool of technical and professional expertise.
Ranked amongst the top ten public sector companies in India in terms of turnover, SAIL manufactures and sells a broad range of steel products, including hot and cold rolled sheets and coils, galvanized sheets, electrical sheets, structural, railway products, plates, bars and rods, stainless steel and other alloy steels. SAIL produces iron and steel at four integrated plants and three special steel plants, located principally in the eastern and central regions of India and situated close to domestic sources of raw materials, including the Company‟s iron ore, limestone and dolomite mines.
SAIL‟s wide range of long and flat steel products are much in demand in the domestic as well as the international market. This vital responsibility is carried out by SAIL‟s own Central Marketing Organization (CMO) and the International Trade Division. CMO encompasses a wide network of 38 branch offices and 47 stockyards located in major cities and towns throughout India. With technical and managerial expertise and know-how in steel making gained over four decades, SAIL’s Consultancy Division (SAILCON) at New Delhi offers services and consultancy to clients world-wide. SAIL has a well-equipped Research and Development Centre for Iron and Steel (RDCIS) at Ranchi which helps to produce quality steel and develop new technologies for the steel industry. Besides, SAIL has its own in-house Centre for Engineering and Technology (CET), Management Training Institute (MTI) and Safety Organization at Ranchi. SAIL‟s captive mines are under the control of the Raw Materials Division in Calcutta. The Environment Management Division and Growth Division of SAIL operate from their headquarters in Calcutta. Almost all SAIL’s plants and major units are ISO Certified.
HISTORY OF BOKARO STEEL PLANT
Bokaro Steel Plant - the fourth integrated plant in the Public Sector - started taking shape in 1965 in collaboration with the Soviet Union. It was originally incorporated as a limited company on 29th January 1964, and was later merged with SAIL, first as a subsidiary and then as a unit, through the Public Sector Iron & Steel Companies (Restructuring &Miscellaneous Provisions) Act 1978. The construction work started on 6th April 1968. The Plant is hailed as the country‟s first Swadeshi steel plant, built with maximum indigenous content in terms of equipment, material and know-how. Its first Blast Furnace started on 2nd October 1972 and the first phase of 1.7 MT ingot steel was completed on 26th February 1978 with the commissioning of the third Blast Furnace. All units of 4 MT stage have already been commissioned and the 90s' modernization has further upgraded this to 4.5 MTofliquid steel. The new features added in modernization of SMS-II include two twin-strand slab casters along with a Steel Refining Unit. The Steel Refining Unit was inaugurated on 19th September, 1997 and the Continuous Casting Machine on 25th April, 1998. The modernization of the Hot Strip Mill saw addition of new features like high pressure de-scalars, work roll bending, hydraulic automatic gauge control, quick work roll change, laminar cooling etc. New walking beam reheating furnaces are replacing the less efficient pusher type furnaces. Bokaro Steel Plant - the fourth integrated plant in the Public Sector - started taking shape in 1965 in collaboration with the Soviet Union. It was originally incorporated as a limited company on 29th January 1964, and was later merged with SAIL, first as a subsidiary and then as a unit, through the Public Sector Iron & Steel Companies (Restructuring & Miscellaneous Provisions) Act 1978. The construction work started on 6th April 1968.The Plant is hailed as the country‟s first Swadeshi steel plant, built with maximum indigenous content in terms of equipment, material and know-how. Its first Blast Furnace started on 2nd October 1972 and the first phase of 1.7 MT ingot steel was completed on 26th February 1978 with the commissioning of the third Blast Furnace. All units of 4 MT stage have already been commissioned and the 90s' modernization has further upgraded this to 4.5MT of liquid steel.The new features added in modernization of SMS-II include two twin-strand slab casters along with a Steel Refining Unit. The Steel Refining Unit was inaugurated on 19th September, 1997 and the Continuous Casting Machine on 25th April, 1998. The modernization of the Hot Strip Mill saw addition of new features like high pressure de-scalars, work roll bending, hydraulic automatic gauge control, quick work roll
change, laminar cooling etc. New walking beam reheating furnaces are replacing the less efficient pusher type furnaces. A new hydraulic coiler has been added and two of the existing ones revamped. With the completion of Hot Strip Mill modernization, Bokaro is producing top quality hot rolled products that are well accepted in the global market.Bokaro is designed to produce flat products like Hot Rolled Coils, Hot Rolled Plates, Hot Rolled Sheets, Cold Rolled Coils, Cold Rolled Sheets, Tin Mill Black Plates (TMBP) and Galvanized Plain and Corrugated (GP/GC) Sheets. Bokaro has provided a strong raw material base for a variety of modern engineering industries including automobile, pipe and tube, LPG cylinder, barrel and drum producing industries.
To be a respected world–class corporation and the leader in Indian Steel business in quality, productivity, profitability and customer satisfaction.
Consistent with the corporate vision and core values, Bokaro steel plantstrives to create sustainable long term competitive advantages bymanaging, mobilizing, inspiring and motivating its employeesforcontinuous growth in productivity, quality and profitability leading tototal customer satisfaction. Bokaro steel plant recognizes that through the process of competencesbuilding, people involvement, unleashing and leveraging the creativeenergies of our people, we can create value for organization and exceedthe needs and expectation of our stakeholders. Bokaro steel plant committed to safety, health and environment friendlyoperation and practices for its people as well as personal touch in allpeople initiative and interaction to bring since of togetherness and pridewe believes people create value when they feel valued.TOTAL SALEABLE STEEL-3780 000 TONNES.
To acquire, operate and maintain the existing captive power and steam generating station of SAIL at Bokaro Steel Plant in the state of Hharkhand along with switchyard connected therewith and such other facilities and activivties incidental thereto.
To supply power and steam to BSL from the existing captive power and steam generating station at Bokaro and associated units / facilities of SAIL so as to maintain its captive status for the Bokaro Steel Plant.
Function of Company
SAIL has the following Credo: We build lasting relationships with customers based on trust and mutual benefit. We uphold highest ethical standards in conduct of our business. We create and nurture a culture that supports flexibility, learning and is proactiveto change. We chart a challenging career for employees with opportunities for advancementand rewards. We value the opportunity and responsibility to make a meaningful difference inpeople‟s lives.
GENERAL INFOMATION OF SAIL Ownership And Management The Government of India owns about 86% of SAIL's equity and retains voting control of the Company. However, SAIL, by virtue of its "Navratna" status, enjoys significant operational and financial autonomy.
INTEGRATED STEEL PLANT 1. Bokaro Steel Plant (BSL) in Jharkhand 2. Durgapur Steel Plant (DSP) in West Bengal 3. Rourkela Steel Plant (RSP) in Orissa 4. Bhilai Steel Plant (BSP) in Chhattisgarh
SPECIAL STEEL PLANTS 1. Alloy Steel Plant (ASP) in West Bengal 2. Salem Steel Plant (SSP) in Tamil Nadu 3. Visvesvaraya Iron & Steel Plant (VISL) in Karnataka
SUBSIDIARIES 1. Indian Iron & Steel Company Limited (BOKARO) in West Bengal. 2. Maharashtra Electrosmelt Limited (MEL) in Maharashtra OTHER UNITS 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Raw Material Division (RMD) at Kolkata, West Bengal Central Marketing Organization (CMO) at Kolkata, West Bengal SAIL Consultancy Division (SAILCON) at New Delhi Research & Development Centre for Iron & Steel (RDCIS) at Ranchi Jharkhand Centre for Engineering & Technology (CET) at Ranchi, Jharkhand Management Training Institute (MTI) at Ranchi, Jharkhand Central Power Training Institute (CPTI) at Rourkela, Orissa SAIL Safety Organization (SSO) at Ranchi, Jharkhand Environment Management Division (EMD) at Kolkata, West Bengal Growth Division (GD) at Kolkata, West Bengal Central Coal Supply Organization (CCSO) at Dhanbad
ORGANISATION STRUCTURE OF SAIL
DIRECTOR (TECH) MANAGING DIRECTOR, BSL
DIRECTOR PERSONAL MANAGING DIRECTOR, BSL DIRECTOR FINANCE CHIEF VIGILANCE OFFICER EXE. DIRRCTOR RAWRRRRRRRRRRRR (OPERATIONS) EXE. DIR. (IA) MANAGING DIRECTOR, RSP
MANAGING DIRECTOR, DSP
ED (TECH & LEGAL R SERVICES)
EXE. DIR. (PROJECTS) EXE. DIR (CMMG)
EXE. DIRECTOR ASP
EXE. DIRECTOR (CP)
EXE. DIR. (CIG)
Figure showing organisational chart of SAIL.
CORE VALUES OF SAIL
Customer satisfaction. Concern of people. Consistent profitability. Commitment of excellence. Competitive Price Complaint Settlement
PROBLEM OF BOKARO STEEL PLANT
1. 2. Force to recruit Local People At a time when political leaders, displaced people and local residents have united against Bokaro Steel Plant (BSL) and Bokaro Power Supply Company Limited (BPSCL) for non-development of the area, the companies have taken up a confidencebuilding measure in the area 3. Development of the peripheral area of the plant is one of the main demands of displaced people here. The residents felt cheated and blamed BSL for showing apathy even after acquiring their land.
Hot Metal Crude Steel Saleable Steel
14.60 13.47 12.05
22.5 21.6 20
PLAYER’S IN INDUSTRY
SAIL has promoted joint ventures in different areas ranging from power plants to ecommerce. . NTPC SAIL Power Company Pvt. Ltd Set up in March 2001, this 50:50 joint venture between SAIL and the 1. National Thermal Power Corporation (NTPC) operates and manages the Captive Power Plants-II of the Durgapur and Rourkela Steel Plants which have a combined capacity of 240 MW. Bokaro Power Supply Company Pvt. Limited This 50:50 joint venture between SAIL and the Damodar Valley Corporation formed in January 2002 is managing the 302-MW power generation and 1880 tons per hour steam generation facilities at Bokaro Steel Plant. Bokaro Electric Supply Company Pvt. Limited 150 Another SAIL-NTPC joint venture on 50:50 basis formed in March 2002 manages the 74 MW Power Plant-II of Bokaro Steel Plant which has additional capacity of producing tones of steam per hour. UEC SAIL Information Technology Limited This 40:60 joint venture between SAIL and USX Engineers & Consultants, a subsidiary of the US Steel Corporation, promotes information technology in the steel sector. Metaljunction.com Private Limited A joint venture between SAIL and Tata Steel on 50:50 bases, this company promotes e-commerce activities in steel and related areas. SAIL-Bansal Service CenterPvt. Ltd. SAIL has formed a joint venture with BMW industries Ltd. on 40:60 bases to promote a service centre at Bokaro with the objective of adding value to steel. North Bengal dolomite limited A joint venture between SAIL and West Bengal Mineral Development Corporation ltd on 50:50 basis was formed for development of Jayanti Dolomite Deposit, Jalpaiguri for supply of Dolomite to DSP and other plants.
Romelt -SAIL (India) Ltd Romelt Technology developed by Russia for reducing of iron bearing materials, which is carried out with carbon in single A joint venture between SAIL, National Mineral Development Corporation (NMDC) and Russian promoters for marketing stage reactor with the use of oxygen. Bhilai JP Cement Ltd SAIL has also incorporated a joint venture company with M/s Jai prakash Associates Ltd to set up a 2.2 MT cement plant at Bhilai. Likely to commence operations by March'2010.
Major customers 1. Ma Durga Ispat Udyog, Bokaro. 2. Bokaro Devlopement Area. 3. KartikeIspatPvt. Ltd, Kanpur. 4. Amit Steel Corporation, Howrah. 5. Diwan Steel, New Delhi. 6. Nenu Mal & sons, Kanpur. 7. Bhawani Metals, Bokaro. 8. Pandey Metals, Bokaro. 9. Chinar Steel Segment, Bokaro. 10. MangalPvt. Ltd., Bokaro. 11. United IroCoporation, Dhanbad 12. Bharat Supply Company, Kolkatta 13. Anup Steels, Delhi 14. Hanuman & rise Pvt. Ltd, BIADA 15. AmitMetcumPvt. Ltd. Etc 16. Veer kanwarsingh steel Pvt. Ltd. 17. Maatara steel 18. S M S Enterprises 19. Basuki steel Pvt. Ltd 20. Shalimar steel Udoyog 21. ChotanagpurispatPvt.Lmt
CONTRIBUTION IN GDP
Global crude steel production reached 1527 MT in 2011 showing a 6.8 % growth over 2010. India has emerged as a leading player in global steel industry contributing to about 4.7 % of global crude steel production in 2011. Large scale infrastructure expansion plans for twelfth five year plan (FYP: 2012-17) and raising per capita steel consumption in India promises unprecedented growth potential of Indian steel Industry during next 10 years. World crude steel production: 2007-11, country-wise contribution (%) to world crude steel production in 2011
CONTRIBUTION OF INDIA’S ECONOMY TO GLOBAL GDP India ranked as the third largest contributor (5.65%) to global GDP in 2011 in terms of PPP ranking, only behind US and China. India‟s economic growth has slacked during past three years due to worldwide economic slowdown however during next five years it‟s GDP is expected to grow in 6-8 % range. The sectors with high growth potential like manufacturing and construction sectors which account for about one fourth(FY 12) of India‟s GDP will be the key growth drivers for the Indian Steel Industry
GDP (trillion $) of leading global economies in terms of PPP- 201
TOTAL EMPLOYEES Human Resource
SAIL’s total manpower at the end of 30 April, 2012 stood at around 26,288. The company‟s labor productivity 244.02 tones/man/year as on 30.04.12.
Bokaro Steel Plant to fill up 1700 vacanciesTNN Jun 21, 2012, 05.05AM IST BOKARO: Faced with manpower shortage, the Bokaro Steel Plant (BSL), a unit of the Steel Authority of India Limited (SAIL), is coming up with 1,700 job vacancies this year. Chief executive officer (CEO) AnutoshMaitra on Wednesday said the company had got the approval from the SAIL board for recruitment of 1,700 people for which the process would begin this year.
India &The Leading Steel Producers In The World India is the largest producer of sponge iron and fourth largest producer of crude steel in the world. India registered a 5.7 % growth in crude steel production in 2011 against 2010. Japan was the only nation among top ten crude steel producers in the world posting negative growth of minus 1.8 % for crude steel production in 2011 against 2010. Indian steel industry which is not technologically as mature as steel industry of developed economies is implementing latest technology, adapting backward integration and improving efficiency in steel production to reduce cost, increase production and become competitive globally.
Top ten crude steel producers in the world and their steel production in: 2010 and 2011 (MT)
Country China Japan United States India Russia South Korea Germany Ukraine Brazil Turkey
695.5 107.6 86.2 638.7 109.6 80.5
INDIA’S SHARE IN GLOBAL STEEL CONSUMPTION India‟s per capita steel consumption is only 57 kg against global average of 215 kg. This shows a broad scope for increase in per capita steel consumption in India and potential unprecedented expansion of steel industry in India. Global crude steel consumption for 2011 reached about 1373 MT
1) TISCO Sales Turn over -3791 Crores, increase of over 13 % over last year Sales Volume – 2052 MT, increase of over 10 % over last year. Exports – Rs.700 Crore Market Share increased from 2 to 12 % Expanding product mix. 2) RINL Sales Turnover – Rs.1900 Crore, increased by 52 % Sales Volume 2.36 MT, increased by 67 % Exports Rs. 600 crore Market Share increased from 5 % to 21 % 3) ISPAT Sales Turnover Rs.600 crore Capacity 4.2 MT Exports 60 % of total sales. OTHER COMPETITORS Essar Steel Jindal Steel UshaIspat Lanco Industries limited Saeas Goa. Nippon DenroIspat.
SWOT ANALYSIS OF SAIL BSL Strengths
SAIL is the largest steel company in India with a 26% share in total crude steel production. Captive iron ore mines, skilled manpower base, and existing infrastructure for brown-field expansion provide it the strength to retain its leadership position in the Indian steel industry. Its Captive power plants provide it with more than 60% of its total power requirement, a proportion that is likely to increase after expansion in capacity of power plants in its Joint Venture Companies. SAIL has the largest distribution network in India comprising 37 branches, 64 warehouses and 24 customer contact offices. It has a presence in all districts in India through a dealers' network. Its wide range of product-mix enables it to meet the entire range of a customers' requirement. The Company has a strong Research and Development Centre enabling it to develop superior products matching customized needs. As a top profit earner in India SAIL has a healthy balance sheet and is virtually debt free as its short term deposits are much higher than its total loans. Bokaro Steel Plant has huge pool of skilled and experienced personnel. Principle of hierarchy is given due respect in BSL enabling management to ensure proper planning and its implementation. Flawless corporate image of SAIL enhances the confidence of managers and customers alike. Record of harmonious customer relation boots the revenue gap towards north. Huge infrastructure, which provides a strong base for better production and marketing since it has country network of stockyards, dockyards and sales branch offices. The By Product of BSL is coal based and of best quality against the petroleum based By Products of its competitors giving the company edge. A strong R&D cell of the company keeps on working over enriching the quality of the products and to reduce the cost of whole process. It has countrywide network of stockyards and dockyards/ branches/ customer can take material from any location. Customer perception of SAIL is fair and of reliable supplier > SAIL product has International standard. SAIL has a customer friendly approach and improved customer orientation. SAIL is in the market from long time having long term relation from the customers. SAIL, BSL never compromises regarding „QUALITY‟ so it has superior quality.
The current weaknesses of the Company stem from dependence on purchased coal from domestic and overseas suppliers. Some technologically obsolete processes such as ingot casting and the twin hearth furnaces continue to operate and will be eliminated only after implementation of the modernization cum expansion plan. As the integrated steel plants of SAIL are located primarily in the eastern states, it increases the transportation cost to the fast growing markets of the west and south. Due to historical legacy the manpower cost in the Company is higher than its competitors. Also, being a public sector company adherence to a number of rules and procedures slows down the business. Lack of team work inhibits proper implementation of company‟s policy. Word “I” is very much rampant in the workforce of BSL, phrase like “ I am not responsible for the undersigned responsibility” Complex pre and post sale activities repel the probable customers. Due to its large organizational structure involving numerous policies and officials, prompt decision making a real problem. No one wants to take initiative as he/she does not want to be reason for blame if the trick doesn‟t click. The hard working marketing officials are not given due recognition and appropriate reward that hurts their motivation and interest. Due to its large organizational structure, which involves numerous policies and officials, it becomes difficult to take decision quickly and as result final decision making becomes very slow. Secondary product marketing depends on the primary product demand i.e. the demand for primary product is less the production will have to be slowed down thus even if the demand for secondary product is mounting up still the production won‟t be increased, so the secondary product is directly linked to primary product demand. Quality of the product which is slightly inferior as compared to competitors who are having latest technology. Sometimes products are not supplied as per requirement of customer.
Steel consumption in India is growing at a rate of more than 10%, a trend that is likely to persist as the nation enters into a steel intensive phase of development. The 11th Five Year Plan has given a major thrust on the infrastructure sector with the total spending planned at around US $ 500 billion by 2012. Mega projects in the power, energy, ports, railways and surface transportation sectors, plans for rural infrastructure like Bharat Nirman, allocation for which was raised to Rs. 31,280 crore and building over 2 lakh kilometers of National Highways by 2010, present an unprecedented opportunity for SAIL which is implementing expansion cum modernization plan to cater to the emerging demand. The size range and quality makes SAIL's long products a preferred choice for project customers. In case of flat products, SAIL remains a major supplier of HR Coils to the tube making sector and is slowly increasing its presence in cold reducing segment. Plates from SAIL are rated amongst the best and are in good demand from project customers. The water supply and oil & gas sectors are the other segments where there is a large growth potential. The modernized ERW Pipe Mill at Rourkela Steel Plant is able to cater to the requirement of these sectors. Bokaro Steel Plant and Bhilai Steel Plant are also producing small quantities of API grade HR Coil and Plates for servicing these sectors. The per capita consumption in India at around 46 kg remains very low compared to the world average of around 200 kg. One of the reasons for low steel consumption is low availability of steel in the rural area. SAIL in recent years has developed a dealers' network which covers all the districts in India. This will facilitate availability of quality steel in the interiors and promote market development and growth. At a macro level, steel consuming segments such as construction, auto, capital goods etc. are growing rapidly registering a double digit growth in recent years and would continue to be the growth drivers given the structure of the economy. The auto sector in India has experienced rapid growth for a number of years. Improved road, growing middle class and globally competitive auto ancillary industry have been the facilitators of good growth for the sector. Technological breakthrough and global competitiveness in two wheeler and small car segments are likely to make India a global hub for these products boosting demand for steel in the country.
The world market is showing the sign of revival from the spiral of recession in which it remained engulfed for one year. State government has plans for revocation of small scale industries in & around Bokaro, which will fuel the demand of secondary & by product.
Cock oven batteries 1 & 2 are rebuilt which will ultimately increase the efficiency of Coke Oven By product plant. Since SAIL has a wide network of stockyards/branch offices, it can supply its products directly to customers without any difficulty. SAIL has a very strong base it can diversify itself into the production of different goods as per market requirements. There is growing demand for secondary product in both domestic and international market.
Customs duty on steel imports has been made nil in India and products such as TMT are also exempt from CVD. Sluggish market conditions in developing economies may make India destination for large scale imports adversely affecting domestic players. Government of India has imposed export levy on steel products. India is a net exporter of galvanized products as its total capacity is in excess of domestic demand. Adverse impact on exports of galvanized products will have a cascading impact on domestic market for cold rolled and hot rolled coils and sheets. China's production of crude steel at 489 million tonne in 2007 was around 36% of the global production. As Chinese economy matures and its steel consumption stabilizes, a part of the capacity will be serving only the export markets. The proximity and growing domestic steel consumption will make India a preferred destination for Chinese steel, significantly intensifying the competition. Globalized economies have erased the geographical boundaries and have brought stiff competition “Execution &dBSLatch of order” include lot of paper works & formalities, which makes it a cumbersome task. This has led to drifting of customers towards competitor. By products are not the main products of BSL, neither BSL is the market leader of these product.BSL fixes the price of the By Products on the basis of price set by its market leaders i.e. Petroleum refineries & this pricing is known as going rate pricing. Acquisition of Corus by Tata Steel will led to integration of their technology & this is the place where Tata is going to gain a lot. Technology in India is two to three generation behind. Exposure to latest technology will help Tata to improve quality & reduce cost. So SAIL should be cautious in this respect
Research methodology is considered as the nerve of the project. Without a proper wellorganized research plan, it is impossible to complete the project and reach to any conclusion. The project was based on the survey plan. The main objective of
survey was to collect appropriate data, which work as a base for drawing conclusion and getting result.
Therefore, research methodology is the way to systematically solve the research problem. Research methodology not only talks of the methods but also logic behind the methods used in the context of a research study and it explains why a particular method has been used in the preference of the other methods.
Statement Of Research Problem The objective was to find out the marketing mix of BSL-SAIL, and to find out the marketing procedures followed in marketing of secondary products within BSL-SAIL.
STATEMENT OF RESEARCH OBJECTIVES Primary objective The main objective of field survey during the project was to find out the market mix of BSL-SAIL. Find out the different methods by which the marketing of secondary products are carried out. The main objective of research was to identify the strategy which is being used in BSL-SAIL.
Secondary objective While purchasing the BSL-SAIL products which parameter is most important for the consumer? To make a comparative data analytical report for the production of various steel products within BSL-SAIL. To enhance the knowledge of Iron and Steel products market. To enhance the knowledge about the marketing set up of a Public Sector.
Types of research used
Primary Research - Here the data is collected directly from the respondentsusing various data collecting techniques. In this method although the rate of getting responses and feedback is slower, then also it is much more accurate as direct conversation with the population is being conducted here. Secondary Research –It is being done generally with the data already existingwhich is been collected by some other person or organization.
RESEARCH DESIGN: Research design is important primarily because of the increased complexity in themarket as well as marketing approaches available to the researchers. In fact, it is thekey to the evolution of successful marketing strategies and programmers. Itis an important tool to to study buyer‟sbehavior, consumption pattern, brandloyalty, and focus market changes. A research design specifies the methods andprocedures for conducting a particular study. According to Kerlinger, “Research Design is a plan, conceptual structure, and strategy of investigation conceived asto obtain answers to research questions and to control variance. DATA COLLECTION METHODS: Primary data: For primary data collection, I have used different data collecting methods such as conducting survey interviews, distributing questionnaires, direct observation, and telephonic interviews with mainly executive officers, dealers, employers, etc.
Secondary Data: It is being collected from different Journals at BSL-SAIL, financial data from Finance Department, Production and DBSLatch data from PPC department at BSL-SAIL, Burnpur.
Data analysis and interpretation: Questionnaires (Two sets of it.) Bar chart
ISP-SAIL is a huge organisation and so it was not possible to cover the entire organisation. Time factor for the staff is a big problem. To get certain official and technical data is a real problem as they are highly confidential. The marketing policies of ISP-SAIL change from time to time and from product to product. The product range of ISP is numerous and so it is not possible to cover each and every product. Lack of proper guidance during specific situations.
Preparation of report: The report was based on the analysis and presented with the findings and suggestions. The sample of the questionnaires is attached with the report itself.
Sampling Methodology: Details of the sampling methodology, I have made 2 sets of questionnaires, one for the Executive and Non-Executive staff at BSL-SAIL; and the other for the personswho are a potential customer with the organization.
Non-Excutive staff members are :
03 150 100
Sample unit Professionals, Business man, Employees and finally customers.
Marketing Department Overview OfBokaro Steel Plant
ManagementDivision of Bokaro Steel Plant. Marketing Department is entrusted with theresponsibilities to sell BSL‟s Secondary Products, By-Products/Waste Products,and Idle Assets etc.
The Marketing Departments sales procedures are covered by the guidelinesgiven by SAIL Corporate office DELHI, and is given by CMMG(CORPORATE MATERIAL MANAGEMENT GROUP), the objective ofwhich is “To sell the materials in a fair and transparent manner to achievemaximum possible revenue to the company”
(a) Marketing of prime products of SAIL‟s plant including BSL is done byCMO (Central Marketing Organization) which is a unit of SAIL.
(b) Marketing of secondary products and coal chemicals are done directly byMarketing Department of BSL. As a matter of fact, the Secondary & By-Products are marketed by the individual Plants only.
Marketing of these products are conducted by various sections by marketingdepartment of Bokaro Steel plants. It is engaged, with marketing of PrimaryProducts for home sale or export throughCMO. The 4.0 Million tones sectionknown as plate mill section dealing with plates. Now this section has got ISO -9002 certificate.The secondary section deals with the secondary Products, it includes scraps ofiron and steel slag, coal and coke fractions, coal chemicals .The Marketing development section deals with the MIS and strategic Planningactivity come under this section.The Export section deals with the activities of the exports in respect of Iron andSteel items produced by Bokaro steel plant.
ORGANISTATION CHART OF MARKETING DEPARTMENT (BSL)
Jr. Mgr. (Co-ordn.)/Mktg. Cord, HK, Admn.& Est. Training Officer DGM (Mktg.) Audit, Vigilance, RTI, & other queries reply, Contract Cell(MM), Sec. Sales
AGM(Mktg.) Sec. Steel Ad &Est, QC, ISO, DCA, Contract Cell(MM)
Sr. Mgr. (Mktg.) (Mktg.) Slag, Waste, Iron,Smug. Scheme
Idle Assets, U&S, Surplus
Sr. Mgr. (Mktg.) Coal& Chem., Zinc Dross, Ammonium Sulphate& Ferrous Sulphate
Manager (Mktg.) Reports, Price Monitoring, MIS
Jr. Mgr. (Mktg.) Secondary Steel, Safety Officer
Jr. Mgr. (Mktg.)
Function Of Marketing Department
To monitor the orders issued by CMO, So that these orders can fulfilled intime. Put pressure on CMO, to get orders for an underutilized mill. To sell all the secondary products directly i.e. directly by BSL and by CMO. On day to day basis it takes care of the dBSLatches i.e. daily dBSLatcharechecked.
Policies Of Marketing
Marketing Planning has responsible function in the working of marketingdepartment. All the risky developments, taking out solution to cripple`situations, this section carries out product pricing and related activities, someof the programmes, policies and procedures are as follows:-
Positioning the product a value based place in customer mind. Finalize annual sales plan and quantity, monthly, weekly, and daily rollingprogramme of Rolling mills in consultation with CMO and mills. This plans based on the sales forecast receive from JPU SPL/ Iron and steelcontroller. Optimizing the product-mix by proper utilization of available stocks. Receiving Enquiries and complaints, cancellation of orders etc. Coordinating the works of mills and traffic department so as to maximizedBSLatches. Co-ordinations with CMO from stages of enquiry, forexports,development of new Profiles, sections, modification of product schedulingtill the orders are completed. Periodical market surveys of products to analyze the market position. Implementation of suggestions received from the customers‟ feedback. Ensure customer satisfaction by meeting customers regularly; provideredress to their problems and fulfillment of demand.
SALES & CO-ORDINATION DEPARTMENT
The main function of sales and co-ordination department is to co-ordinate all the concerned activities right from the purchase of items, production of items, to the distribution of items to its concerned customers. This department concerns with…… Knowing the availability of raw materials. Matching the availability with the demand registered. Makes flow of this information to the concerned department for meeting the demand. Co-ordination of concerned activities is done. Dispatching of materials to the concerned customers. Its flow of information is through…
PRODUCTIO & PLANNING CONTROL After successful co-ordination, the final dispatching of materials is done in two ways. 1) DIRECT DISPATCH: -Materials directly sent to the customers, no intermediary is entertained, e.g. major customers (railways, NTPC, Indian oil) 2) STOCK-YARD DISPATCH :-It follows inventory management concept, distribution of products from the inventory, through several intermediary, e.g. minor customers ( GODREJ).
ROLE OF P’S IN BOKARO STEEL PLANT Products of “Bokaro steel plant”
PRIMARY (SPECIFIC PARAMETER)
UNITS- BSL, BSS, RSP, DSP etc
METHOD OF SELLING
FIXED PRICE SALE
BSL MARKETING (MAIN SECTION)
CHEMICAL & BYPRODUCTS
SLAGS & WASTE PRODUCTS
The products are divided according to there sizes and shapes.The long product include: Struturals. Crane Rails. Bars,Rods and Rebars. Wire Rods.
SECONDARY AND BY-PRODUCTS OF BSL
Apart from the primary and main steel products there are some other products which are obtained during the steel making process. These products are termed as secondary and by products. Some of the products are used within the Plant while rests are sold in the market.
Secondary products are the defective and rejected steel products. During the manufacturing process due to improper mixing of material or some other manufacturing defect some of the products are not produced according to the desired quality and do not match with the customer‟s demand. Hence these are rejected and termed as Secondary products. Some of these products are used within the Plant for re-melting purpose and rests are sold to the secondary buyers. Scraps generated inside the Plant are also termed as Secondary products. A list of Secondary products is as follows.
LIST OF SECONDARY PRODUCTS
PRODUCT A. IRON MELTING SCRAP CI.Block/SHM/CI Boulder(Unbroken)/RBIM PCM Shot Plate Scrap/CI Skull Mixed CI Scrap/CI Fdry. Rejects Fine Iron Chips/CI Boring PRODUCT B. INDUSTRIAL SCRAPS HR Coils DDHR Pickled Coils CRUAC/Def CR Coil/CRCE Defective CR Sheet/CR Sheet ctg. AMG HR Plate/Sheet/Ctg Def.GP/GC Coil/Sheet MCRC/Maint. scrap-ASP MS Turning & Boring
C. PIG IRON
D. BFG SLAG BF Granulated Slag
E. REROLLABLE STEEL SCRAP Defective Slabs Slab End Cutting MS Thick Plate Cuttings Cobble Plate
F. IDLE ASSETS Used rejected rolls Used rejected stores items Capital Idle Assets
G. STEEL MELTING SCRAP
H. NON FERROUS (Zinc Dross)
By-Products are mainly coal chemicals which come out during the coke making process. Coke making process consists of the destructive distillation of coal in absence of air. A list of By Products which are sold by BSL is as follows: PRODUCT MODE DELIVERY A. Products (Benzene) Benzyl Railway tank It is used as an important raw material for various OF USES
wagons, road tankers drugs and dyes. Benzene hexa chloride is used as a in loose condition pesticide. It is also used in the manufacturing of phenol, DDT, nylon etc.
Toluene Railway tank wagons
It is used as a solvent in chemical reactions, Paint industries, rubber industries, making of adhesives, making of printing ink etc.
(Nitration grade) C. Xylene Railway tank wagons
It is used in making of Paints, thinners & varnish, printing ink and in rubber industry.
D. Light Solvent Railway tank wagons Naptha
It is used as solvent, making of dyes and printing ink
E. Still Bottom Railway tank wagons It is mixed with other materials and used for various Oil and road tankers purposes like water- proofing, making of roofs of building. It is also used as industrial oil and in making of rubber paints for vehicles. F. Extra Hard Gunny bags in loose In aluminum industries as a binding material for Pitch G. Soft Pitch condition anode.
Gunny bags in loose It is used in the production of pitch fiber pipes, roof condition binders, in preparation of road tar, building materials, sheeting, tilling etc. It is also used as refractory bricks.
H. Hot Pressed Gunny bags in loose It is used as Dye intermediate, as an insecticide, Naphthalene condition dBSLersing agent etc.
DETAILS OF THE PRODUCTS
Hot Rolled Coils, Sheets and Skelp Hot rolled coils, sheets and skelp (narrow coil), are the largest product category of the company in terms of both sales volume and revenue. Hot rolled coils are primarily used for making pipes and have many direct industrial and manufacturing applications, including the construction of tanks, railway cars, bicycle frames, ships, engineering and military equip-ment and automobile and truck wheels, frames and body parts. Hot rolled coils are also used as feedstock for cold rolling mills where they undergo further process-ing. Hot rolled coils are also delivered to the company's own cold rolling mills and silicon sheet mill and pipe plant in a wide range of widths and thicknesses as the feedstock for higher value-added steel products. The company is the largest producer of hot rolled coils, sheets and skelp in India. Semi-Finished Products The company produces semi-finished products, including blooms, billets and slabs, which are converted into finished products in the company's processing plant and, to a lesser extent, sold to rerollers for conversion to finished products. Steel plates are used mainly for the manufacture of bridges, steel structures, ships, large diameter pipes, storage tanks, boilers, railway wagons and pressurevessels. Plates The company also produces weatherproof steel plates for the construction of railcars. The company is currently the largest producer of steel plates in India with a domestic market share of more than 80 per cent for these products. The company is the only producer of wide and heavy plate products in India.
Cold Rolled Products Cold rolling of hot rolled products produces a superior surface finish, improves the physical properties of the steel, such as tensile strength, and reduces its thickness to precise gauges. As a result, cold rolled products generally command higher prices thanhot rolled
products. The products of the cold rolling mill include cold rolled sheets and coils, which are used primarily for precision tubes, containers, bicycles, furniture and for use by the automobile industry to produce car body panels. Cold rolled products are also used for further processing, including for colour coating, galvanising and tinning. The company also produces further processed cold rolled products, including galvanised sheets and tin plates. Structurals Structural steel product are produced through a process of hot rolling in the section or structural mills. They are long steel product with cross sections of various shapes. I-beams, Channels and angle steel are used in mining the construction of tunnels factory structure, transmission towers, bridge, ships railways and other infrastructure projects. Bars and Rods The company produced steel bars and rods through a process of hot rolling billets in the finishing mills. Reinforcement steels and wire rods are primarily used by the construction industry. The company is one of the largest producers of reinforcement bars in India which are primarily sold to the construction industry.
PRICING POLICY AND SALES PROCEDURE
PRICING Fixing the price of a product is the most vital function in the whole process ofthe marketing and it should be done after proper market study and requires decision making ability. If price is too low the company will lose revenue and if the price is too high it will lose customers resulting in loss of revenue valuable customers. Coal chemicals are the main product which is to be marketed by the Marketing Department of Bokaro Steel Plant. Almost all the products are sold on the fixed price basis. This is due to the fact that the company does not enjoy monopoly in the said market and the price is totally market driven.
The policy adopted by the marketing department for pricing of materials is largely guided by the price offered by the bidders during the auction. The various factors taken into consideration while pricing the re-rollable items can be enumerated as follows: -
Prices offered in the auction sales. Quantity of material to be lifted. Managing director's approval.
The average of the prices offered by the bidder during auction is taken as thebasis to fix the prices of materials to be sold through marketing department.Further the techniques of break-up-pricing are adopted i.e. the larger thequantity purchased lower will be the prices. This technique encourages thebuyers to purchase larger quantity. Finally the managing director approves theprices set by the pricing committee. On this basis, a price list is prepared for allthe potential buyers. Price list also indicates the sales tax and Excise duty to belevied. Thus the interested parties place their orders with the marketingdepartment on the basis of price list reviewed every month. Every customer isrequired to have a security deposit amount of Rs.1 lakh. The payment for thematerial required is to be in advance. The material is supposed to be lifted on the specified date on account of delay the party has to pay the difference in theprices, if there is any increase in subsequent month.
Standing Pricing Committee:
The committee reviews the price of various products and takes decision in favour of maximizing the profit. It holds meeting at least once in a month. But the volatility of the market and pool of different products lead to a number of meeting of the committee in quick succession.
The committee consists of:
GM (Utility), Chairman GM (Marketing), Convener DGM (Finance), member DGM (Sales Coordination), member DGM (Stores), member DGM (BPP), member
For Scrap goods the DGM (SSD) replaces the DGM (BPP). Rests of all the members are always present in all the meetings.
While deciding the price following points are kept in mind:
DBSLatch of the last month. Material in stock. Forecast of next month. General market condition. Availability of transport facility.
GM (Marketing), as per the need, decides the frequency and time of meetings to be held. Minute report of all the meetings is prepared and it contains the existing price and the proposed price. The final price is moved to the MD through the official channel including GM (Marketing), Executive Director(MM), GM (Finance and Accounts), and ED (Works). After the MD‟s approvalthe price becomes applicable and the circular indicating the
revised price BSLrinted, issued and distribution to the customers and all the concerneddepartments.
DEMAND REGISTRATION OF BSL
Marketing department of BSL sales homogeneous steel scrap at fixed price. For this purpose the procedure for registration of demand and offers is as below: 1. Preference for sale of material given to local parties and those, which are actual customer. Material is not sold for trade. 2. Sale of material made to re-rolling mills and scrap processing units and the lots of sale between them maintained at 67:33. 3. Based on the above consideration “offer letter” issued to the party offering a quantity, which has been lifted by them during the last preceding year or allocated by the state industries, Department. In the offer letter party is advised to complete commercial formalities e.g. submission of “Die Registration Certificate “etc.
“SALES AND DISTRIBUTION OF SECONDARY & BY-PRODUCT” Selling Of Secondary Product This involves a direct marketing process. The management of BSL in consultation with the official of the market development and customer service department work as group for the sale of these items. Mode Of Sale 1.E-Auction Sale. 2.Fixed Price Sale. 3. Tender. 4. Interplant Transfer. 5. Transfer to PSU.
For the purpose of distribution of steel policy in fashion, customer are categories into A.B.C.D Priority sector customer ex-Defence. Railways etc are under category A and about 60% of product allotted to them.The balance 40% is kept for the category B,C,D.On the other hand for sale of scraps there is no such policy adopted by Bokaro steel plant customer are served on first served basis. Bokaro Steel Plant deals with its customer directly. There are liaising persons in the marketing department who always remain in contact with the customers and extract information about the current market demand on the basis of their interaction with them. The products are directly marketed from Bokaro Steel Plant to the customers there are no other intermediaries .This is the business to Business marketing (B2B). CHANNEL Bokaro steel plant has zero level channels as it directly sells to the customer. There is no intermediate among producer and consumer. Marketing department always remains in constant with consumer extract information about the current market situation on the basis of interactions between them. MANUFATURE TO INDUSTRIAL CONSUMER Packing and modes of delivery of the by-product is mainly by three ways. These are as follows:1. Railway tanks (wagon) 2. Roadways (tanker) 3. Piggy back (rail and truck) In the above surveys shows roadways do that 70% transportation of By-product reason consumer are local. They are mainly traders they are buying and selling the By-product to the market. Railway is also important to the transportation of By-product but it‟s more costly because less number of the buyer involvement in the outside of the country. The distribution channel the Bokaro Steel Plant has for its chemical product is designed keeping in the mind the hazardous nature and difficulty in storing these products. so this distribution channel cannot be changed but for Ammonium Sulphate the distribution channel can be more flexible by:41
Appointment of authorized agents :- It will help in increasing the sale and awareness about the product in the regions other than Bihar,Orissa,Jharkhand and west Bengal. Such arrangement will minimize the problem that the customers are facing . Appointment of authorized dealers;- appointment of the authorized dealers in Uttar Pradesh from where a few enquiries have come for the product. Such enquiries show that there is a presence of the potential customer base in that area and need to be tapped. Buying and using vehicles off its own can change the mode of the transportation for the chemical products.this will decrease customer‟s problem of arranging for the vehicles from the transporters and the handling and security problem of the plant. The customer will be changed the transportation cost. The pricing policy adopted by the plant is the best policy followed by this plant but this policy can be made more compatible including a few big customers in the pricing committee which will bring the prices of the product competitive to the market trend and thus will decrease the chances of marketing strategy failure and surplus inventory. As the product quality is not taken care of some method should be divided to take care of product quality without affecting the quality of its prime product. the internal environment of the marketing department should be more customer friendly and customer oriented. though computerization of the marketing department has been done but to get full advantage of computerization, sales co-ordination ,scrap and salvage department and by-product plant should be brought into account so that party wise and dBSLatches wise a order can be fulfill. In future sales and excise section of the finance and account department also be brought under same roof : The Market segment should be more clearly defined on the basis of geographical location, nature buying unit, loyalty status of buying unit ,customer demand etc. Market Research for knowing about the potential customer as well getting the feedback from the customer should be frequently done. Feedback can be easily available through questionnaire and ask them to fill and back to organization and suggestion. My studies have been done from a management student‟s point of view .the above mentioned recommendation are in any based upon informal and formal feedback obtained from the manager‟s .The Management of SAIL(BOKARO STEEL OLANT) honestly concerns for the future growth of the organization at the time of increased competitors
,should take care on the recommendation given above. The macro and micro planning is definitely varied but their enforcement will ensure SAIL in regaining and building its glory on top.
PRICE OF BY PRODUCT DURING 2011-2012
ITEM AMONIUM SULPHATE BENZENE ANTHEACENE OIL price 7500-8000/T 39000-40500/T 35000-40000/T
40000 35000 30000 25000 20000 15000 10000 5000 0 AMONIUM SULPHATE BENZENE ANTHEACENE OIL
INFERENCE:Statement Of Sale Of By Products (Values In Lakhs) PERIOD 2011-12 1ST QTR 2ND QTR 3RD QTR 4TH QTR 850 945 916 1022 1224 815 1222 1577 1278 55 844 1572 2009-10 2010-11
1600 1400 1200 1000 2009-10 800 600 400 200 0 1ST QTR 2ND QTR 3RD QTR 4TH QTR 2010-11
SALES BY-PRODUCT(VALUES IN LAKHS) PERIOD 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 2009-10 2556 9223 2242 1232 10322 2010-11 9293 16205 16237 23639 65427 2011-12 18896 17141 11740 17495 65272
160000 140000 120000 100000 80000 60000 40000 20000 0 1ST 2nd 3rd 4th TOTAL 2011-12 2010-11 2009-10
PROFIT IN BSL
YEAR 2008-09 2009-10 2010-11 2011-12 PROFIT(IN CRORE) 1324 1628 1367 2830
3000 2500 2000 1500 1000 500 0 2008-09 2009-10 2010-11 Category 4 PROFIT
PROCEDURE OF E-AUCTION
Advertisement/posting of dates and types of materials to be auctioned in SAIL website and various news papers (Local & National) every 15th to 20th of the month for the next month, 1. Posting of details of lots to be auctioned one week prior to the date of auction, on the website of SAIL and metal Junction.com 2. 3. 4. 5. 6. 7. 8. Inspection of lots to be auctioned by customers. Auction is held on www. Metal Junction.com Report of auction conducted is give by Metal Junction.com Meeting of reserve price opening committee and their recommendation. Approval for sale of lots recommended by RP opening committee. Issue of offer to the customers, based on approval of chief Executives. In this method the defective materials from all the mills is arranged in heaps of 100150 tones to be sold by auction. Generally auction sale takes place ones in a month. Representative from all the re-rolling mills turn up during auction and they bid for the available material. The raw material need of this mill is being made by the plant and the availability of the re-reliable has increased the re-rolling mill to develop very fast. The plant extends all types of facilities and assistance to these small scale units, which to turn give scope for more employment, and then the material is lifted on the terms and conditions as mentioned in the tenders.
DATA FLOW DIAGRAM OF E-AUCTION
Advertisement of dates/type of materials on SAIL website/Newspaper
Posting of lot details to be auctioned on SAIL / Metal Junction website
Inspection of lots by customers
Auction conducted on metaljunction.com
Report of Auction by metaljunction.com
Reserve Price Opening 47 Committee meeting
Recommendations Approval for Sale
ADVERTISING POLICY:Companies in the present scenario of globalization and liberalization needs to do more than making good product or competitively pricing its product-they need to inform consumers about product and carefully position product in consumer‟s mind. Advertisement is the best form of non-personal communication. It is good way to inform and persuade. Advertising serves the dual purpose of informing the product benefit and positioning the product in consumer‟s mind. Bokaro Steel Plant, products (i.e. –products) is used mainly of industrial use. Its product is the raw material for most of its consumers. The customer base of BSL Plant is knowledgeable and knows about the products and its benefit so on special effort is needed inform them about the product. In BSL Plant, the main form of advertising is Tender Notice and notice other form of advertising is also used but rarely. Information is provided to various persons through advertising, which are directly or indirectly related with company. There are: Customers. Users. General Public or neutral persons. People who are related with the economic progress of the company.
Public relation Department of Bokaro Steel Plant looks after the advertising policy of Bokaro Steel Plant. All decisions related with advertising are taken by both Marketing and Public Relation Department jointly supported by sales co-ordination.
All advertisement of SAIL mainly contains factual date related to the products and its comparative advantage over other similar products sometimes it also contains information related to sales of a particular kind of product. Main media used for advertising these products are newspapers and business magazines. News papers and business magazines are selected based on the following criterions:1. 2. 3. 4. Kind of product to be advertised and its used. Are where the product is in demand. Circulation of a particular newspaper and business magazines in the area. Cost of advertising.
ADVERTISING AGENCIES USED Mainly six advertising agency are used by bokaro steel plant Continental advertising agency , Kolkata The international advertising agency , Kolkata Kavya communication pvt ltd , new Delhi Message advertising and designing , Patna Ranchi data system , Ranchi Ridge advertising , Ranchi
DISCUSSION ON TRAINING
Student‟s Work Profile (Role And Responsibilities) Role: I was given the role of observer by SAIL BSL. My role was to collect information about the strategies used by BSL to market its secondary products and also to understand the Marketing Mix of SAILBSL, as a Management Trainee. Responsibilities: During the period of this project my company (BSL) has given me so many responsibilities. They are as follows
Survey, Collection of data by preparing questionnaires, Analysis of the situation and Marketing procedures Reporting to the officer
DESCRIPTION OF LIVE EXPERIENCE From this project, I have got an amazing live experience. As I am a fresh Graduate, so I do not have any type of experience in a corporate work field. So, when I went to different types of departments in BSL for asking about their way of conducting their process, I was enjoying. I was quite surprised because of their friendly behavior. Moreover during my plant visit programme, I was really thrilled to see the different methodologies that are used to produce the material which is a necessary product in every bodies life and also for a
growing nation, i:eSTEEL.
I am also really greatful to work with many officers in the Marketing department, where I got my first practical knowledge in the field of marketing. I was really excited to apply my theoretical knowledge in practicality.
STUDENT’S CONTRIBUTION TO ORGANIZATION Gathering the product knowledge of SAIL for its knowledge bank. Collect the data of actual monthly production and sale of BSL products and by products in every trading. Help to promote the catalog of BSL as a small part of sales promotion. Find out the problems that the dealer are facing while selling the BSL product. Find out the consumer response for the BSL product by asking the dealers of the relevant product. Presenting a detailed report on marketing strategies and marketing mix in BSL-SAIL.
Questionnaire for Understanding Marketing Strategiesat BOKARO Steel Plant- SAIL
What is the market opportunity? What is the market size? Market size with respect to geography and to industry.
How can the market be segmented into logical customer groupings? What are the industry trends that are fueling our success? And what are the trends that are inhibiting our success?
According to you, what is the economic climate now and how will it be in the upcoming two years?
How the economic climate does affect our business? Is the market or our business is affected by seasons and climate? If so, then how?
Target audience: 1. 2. 3. What marketing segments are we targeting? What segments we are not targeting? What is our customers‟ primary reason Why would someone prefer our products and offerings versus that offers by the competitors? 4. Are there any issues or concerns that the target audience might have regarding this type of product or offering?
Competition: 1. 2. What categories of competition threaten our success? Prioritize the categories? Which are the companies which poses greatest threat to us? And how do they differentiate themselves? 3. 4. 5. What tactical elements do they use to that threaten our success? Which competitors have the largest market share within our target market segments? What are the barriers which we are creating for ourselves to entry into the market place?
Offering: 1. What need is our offering or product designed to fill? Identify the need for each target audience? 2. 3. 4. What features and associated benefits does our offering provide? How do we deliver the offerings identified above? Of all these features, which one is of that extra value that differentiates us from our competitors? 5. 6. What improvements can we make to our offering to better meet customer needs? What new offerings would our customers most like us to develop?
Sales and Buying Process:
What is the process for selling our products? Do we use any of the following processes?
>Direct Personal Sale >Direct Online Sale >Indirect through channels 2. Who is involved, both from our company and from our sales channel partners, in each step of the sales process? 3. 4. 5. What criteria are used in selecting a vendor or a customer? How do our customers buy our type of products? What purchase process steps do we follow with our customers? Does the process vary with respect to different vendors? If yes, then how?
What are the main criteria which are followed in setting the price of the products? What is the current price structure? Including discounts, rebates and so on. Do our customers understand it?
3. 4. 6. 7. 8.
Which of the competitors is considered the Price Leader? What is their offering? What can be done to reduce costs without affecting any quality? What is the perceived value of our offering as compared to the price What service(s) do we currently include in the price of our product? What industry trends are going to drive prices down? And what are the trends which are going to drive prices up?
What are the primary forms of communication your competition use to promote and communicate to your target audience?
Is a product catalogue used to promote products and services? What other forms of media have you used in the past to promote products and services and what has been the success/response rate experienced?
Do you currently market over the Internet or have marketing links with other sites? Do you attend trade shows or other industry events to promote your business?
1.Aug 28, 2013, TOI, Several important development projects - including the construction of new Ganga bridge, fire station in Chas, link road to Chandrapura-Bokaro bridge, VikasBhavan and Chas Water Supply Project - in the district which have been delayed due to funds crunch and other dispute. 2.Aug 24, 2013 BMW Industries gets showcause notice for project delay- BIADA Bokaro Industrial Area Development Authority had showcaused BMW earlier in 2012, for delay. Besides, the company has not paid Rs 3.36 crore as cost of land and maintenance charges, added Toppo. However, P Thomas, director-BMW, sent a letter to BIADA managing director AarvaRajkamal seeking more time to recast the project plan. 3.It has been 46 years since the plant was set up, but the majority of the residents have not received compensation, alternate land or jobs. They are still fighting
NEW DEVELOPMENT OF SAIL BSL
Figures in bracket indicate capacity after implementation of ongoing phase of modernisation and expansion to be completed by 2012-2013
Order for over Rs. 57,012 crore have already been placed for various Modernisation & Expansion Projects / Sustenance Schemes
ANALYSIS OF DATA
Q1. Use of Iron and steel in your life -----------
a. Extremely Important b. Very Important c. Somewhat important d. Not very Important e. Not at all Important.
Q2. Business with BSL -----------
a. Extremely Important b. Very Important c. Somewhat important d. Not very Important e. Not at all Important
3. Product quality of BSL-SAIL -----------
a. Excellent b. Very good c. Good d. Fair e. Poor
Q4. Process of buying products of BSL-SAIL -----------
a. Excellent b. Very good c. Good d. Fair e. Poor
Q5. Price of the products are same as market price -----------
a. Strongly disagree b. Disagree c. Neither agree nor Disagree d. Agree e. Strongly Agree
Q6. BSL-SAIL satisfy your needs and demands ------
a. Strongly disagree b. Disagree c. Neither agree nor Disagree d. Agree e. Strongly Agree
Q7. BSL-SAIL gives better service than other steel plant ---
a. Strongly disagree b. Disagree c. Neither agree nor Disagree d. Agree e. Strongly Agree
Q8. You will continue buying products of BSL-SAIL for next five years ----
a. Strongly Disagree b. Disagree c. Neither agree nor Disagree d. Agree e. Strongly Agree
Q9. What is your opinion about BSL-SAIL?
Q10.What is the first word that comes to your mind when you hear the following?
BOKARO. Steel Plant
30% of customer gives importance to price. So it shows that Indian consumers
are very price sensitive. They give more importance to price over the brand.
26% give importance to brand. So price and Brand matter a lots for the
costumers. And they are also want best brand in best price.
19% to product feature Service 16% and durability 9% Service is also a big
factor for the customer they are less interested in the durability.
RELATED TO MARKETING DEPARTMENT During my Eight weeks training in marketing department of BSL. I have observed certain problems in it these problems are findings of my studies. All marketing procedure of prime products are decided by SAIL and carried out by the Central Marketing Organization (CMO). As the organization is concerned with a large number of productions activities and the departmental work are done mostly manually from placement of orders to documentation, which ultimately frustrates the employees. The organization is more concerned with larger orders of steel products by ignoring the smaller orders. The local customers with business of by-products are sometimes made to wait for days to get their papers Cleared by the department. Most of the existing yards suffers from improper stocking space and siding facility often they are not well developed due to this the material stored there are rusted and other defects are caused and later they are dBSLosed of by offering some concession or at low rate which result in loss. Due to improper packing, the materials reach the stockyard often in damaged condition, which is attracting criticism from the customers and these damaged materials are sold with loss. Export considered Secondary to domestic selling as BSL is a govt. undertaking and its First priority is given to domestic marketing. Secondary product CRUAC/Def CR Coil/CREC, this is industrial scrap and they generate maximum revenue from this product. Sale of By- Products shows lots of up & down in different quarters in the year & maximum sale in last quarter. Production of By-products shows lots of fluctuation because its production is depending on Coke oven plant. BSLatch of By-product shows continuous growth. By-Product N.G.BENZENE they produce maximum revenue because its cost is so high.
CONCLUSIONS AND RECOMMENDATION
The main issue attached with Bokaro Steel Plant is about its product.products is that most of the customers finds its price higher than the other brands of secondary and by-products available in the market. Since, customers are now conscious about cost cutting measures so they other brands over BSL.
Local market is one of the most important advantages than BSL isenjoying over a period of time but, due to set up of new steel plants in nearby places few years from now it will no longer be an advantage for BSL. So, BSL should have to work on decreasing the price of its secondary and by-products and also increase its quality.
Since, from the survey it was found that most of the customers arepurchasing secondary steel and by-products from BSL. So, BSL should have to work on the increase of production of these products and also decrease the price of those products to be competitive in the market.
Most of the customers are also purchasing secondary and by-productsfrom TATA steel because of the lower price and easy method of purchasealthough TATA steel is far from Bokaro district because of better service. So, Bokaro steel plant should have to work on to provide better service for customers.
Since, majority of customers don‟t register complain about the problem they faced during trading although most of the problem that are registered got executed. Hence, BSL should have to work on to improve confidence ofcustomers on them
. Benzene, Toluene and Ammonium sulphate are having highestconsumption among by-products. So, products of mainly these by-productshave to be increased.
Modernization of the plant should be completed in less than a year. More integration with the clients is needed Stability of prices Should be more prompt to response against any requirement and settlement of accounts Each individual from top management to worker should be made aware of cost control, faster production and maintaining quality. Improvement in customer relationship management Continued monitoring of the market Customer service to be given prior importance Committed delivery thrust on quality Complaints should be attained properly Regular customer contact/interaction should be taking place
Questionnaires for the Potential Customers of SAIL-BSL:
Q1. Use of Iron and steel in your life ---------- Extremely Important Very Important Somewhat important Not very Important Not at all Important.
Q2. Business with BSL ---------- Extremely Important Very Important Somewhat important Not very Important Not at all Important
Q3. Product quality of BSL-SAIL ---------- Excellent Very good Good Fair Poor
Q4. Process of buying products of BSL -SAIL ---------- Excellent Very good Good Fair Poor
Q5. Price of the products are same as market price ---------- Strongly disagree Disagree Neither agree nor Disagree Agree Strongly Agree
Q6. BSL-SAIL satisfy your needs and demands ----- Strongly disagree Disagree Neither agree nor Disagree Agree Strongly Agree
Q7. BSL-SAIL gives better service than other steel plant -- Strongly disagree Disagree Neither agree nor Disagree Agree Strongly Agree
Q8. You will continue buying products of BSL-SAIL for next five years --- Strongly Disagree Disagree Neither agree nor Disagree Agree Strongly Agree
. What is your opinion about BSL-SAIL?
Q10.What is the first word that comes to your mind when you hear the following? Steel Industry BSL Steel Plant
www.sail.co.in www.metaljunction.com www.steelrx.com www.bokaro.nic.in www.steel.gov.in
BOOKS Marketing Management Marketing Management Philip Kotler Willian Stanton
Other Sources Report given by the companies Global steel industry news, statistics and information portal Research paper Magazines like Steel world