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STEEL industry is one of the major industries in India. India is the eighth largest steel
producing country in the world. Indian Government plays an important role in the development
of steel. Steel has now been an important part of the industrial economy. Steel was introduced in
the late 1850’s, but steel has been the basic of the world’s industrial economy. Steel Industry is a
business of processing iron ore into steel, which in its simplified form is an iron carbon alloy and
in the same cases turning that metal into partially finished products or recycling scrap material
into steel. Steel is an important indicator to analyze the economic development of a country. The
steel industry is highly scientific and technology oriented. Technological advancement is very
important for the overall health of the organization.

During Ancient Period

The history of iron and steel making in India goes back by several centuries. It dates to
480 BC when archers in India used arrows tipped with steel. The iron pillar of Dhar near Indore
in Madhya Pradesh dates back to about 321 AD, the iron pillar of Kutab Minar near Delhi dates
back to about 400 AD and the iron beams of Sun temple of Konark in Orissa dates back to 13th
century. These pillars are a testimony to ancient India's expertise in the making of steel.

Before Independence
The roots of the Indian Steel industry in modern times can be traced to the year 1874,
when a company called Bengal Iron works at Kulti near Asansol in West Bengal produced iron.
One of the most important landmarks in the history of Indian steel industry was the
commencement of the Tata Iron and Steel Company at Jamshedpur in the state of Bihar in
1907.The other prominent steel manufacturers before independence were Indian Iron and Steel
Company (1922),Mysore Iron and Steel Works(1923) and Steel Corporation of Bengal (1937).

After Independence
India found it difficult to sustain development in steel sector after independence on its
own due to the lack of technological development. The high cost of developing technology in
this sector proved to be a major hindrance. That's when the government decided to go for
synergy with other countries for technology transfer. Some of the prominent steel plant set up
then was in Rourkela in collaboration with West Germany and in Bokaro in collaboration with
Russia. These steel plants came under the purview of public sector enterprises.

Post Liberalization
The post liberalization scenario in the Indian Steel industry has witnessed a monumental
shift. Some of the salient features are:

• The need for license for increasing capacity has been abolished.
• Steel industry has been removed from the list of Industries under the control of state
• Foreign equity investment in steel has gone up to 74%.
• In January 1992 the price and distribution controls were removed.
• Policies like convertibility of rupee on trade account, freedom to mobilize resources from
overseas financial markets and restructuring of existing tax structure have immensely benefited
the industry.


The Indian steel industry has come a long way since its humble beginnings. The takeover
of the British steel giant Corus steel by Tata Steel and the acquisition of Arcelor by Mittal
Steel herald a new beginning for the Indian steel industry. These events signify the fact that the
Indian steel industry has acquired a global identity and is today extremelycompetitiveglobally.
Some of the prominent steel producers today are Posco, Tata Steel, Essar, Ispat, Sail and

Future trends

• It has to be said that the global recession has affected the Indian steel industry especially
stainless steel, but the steel industry is trying to offset the negative effect of the recession by
focusing on transportation and construction projects which are usually funded by the
• India is the only country globally to record a positive overall growth in crude steel
production at 1.01 per cent for the period January -March 2009.
• It is estimated that India's steel consumption will grow at nearly 16% annually till 2012.
• The National Steel Policy has forecasted the demand for steel would reach 110 million
tons by 2019-2020.


India is the fifth largest producer of steel in the world. India Steel Industry has grown by
leaps and bounds, especially in recent times with Indian firms buying steel companies overseas.
The scope for steel industry is huge and industry estimates indicate that the industry will
continue will to grow reasonably in the coming years with huge demands for stainless steel in the
construction of new airports and metro rail projects. The government is planning a massive
enhancement of the steel production capacity of India with the modernization of the existing
steel plants.

Industry Statistics

Government targets to increase the production capacity from 56 million tons annually to
124 MT in the first phase which will come to an end by 2011 - 12. Currently with a production
of 56 million tones India accounts for over 7% of the total steel produced globally, while it
accounts to about 5% of global steel consumption. The steel sector in India grew by 5.3% in
May 2009. Globally India is the only country to post a positive overall growth in the production
of crude steel at 1.01% for the period of January - March in 2009.


About 50% of the steel produced in India is exported. India's export of steel during April
- December 2008 was 64.4 MT as against 9.7 MT in December 2007. In February 2009, steel
export increased by 17% to 12.6 MT from 10.8 MT in the same month last year. More than 50%
of steel from India is exported to China. The Government's decision to reduce export duty on
iron ore lumps from 15% to 5% has given a major boost to the export of steel.


• Power shortage hampers the production of steel

• Use of outdated process for production
• Lags behind in the production of stainless steel
• Deficiency of raw materials required by the industry
• Labor productivity is low. It is 144 tons per worker per year against 600 tons in Western
Europe as per estimates
• Inadequate shipment capacity and transport structure


There are many strong points of the industry that makes it one of the leading names in the
global steel industry. The rate of labor wage in India is among one of the lowest in the world
thereby making large scale production feasible. The boom witnessed in the automobile industry
has ensured that the demand for steel is increasing gradually and will continue to do so in the
near future. There is huge manpower in India which is another reason why steel production in
India is high and the industry is doing pretty well both nationally and internationally.

Numerous steel companies some major projects in the pipeline to invest in India Steel
industry. Steel companies have earmarked more than 100 million USD for the setting up of
sponge iron units in Koppal and Bellary in Karnataka. As per Investment Commission of India
more than 30 billion USD are in the pipeline for investment over the next five years.

Sector structure/Market size

The steel industry in India has been moving from strength to strength and according to
the Annual Report 2009-10 by the Ministry of Steel, India has emerged as the fifth largest
producer of steel in the world and is likely to become the second largest producer of crude steel
by 2015-16.

Recently, Steel Minister, Mr. Virbhadra Singh said that India will become the world's
second-largest steel producer by 2012, more than doubling its capacity to 124 million tons (MT)
as part of the push being given to assist overall infrastructure development.


Steel production rose 4.2 per cent to reach 60 MT in 2009-2010, according to the
Ministry of Steel.

The National Steel Policy 2005 had projected an annual steel consumption growth of 7
per cent based on GDP growth rate of 7-7.5 per cent and production of 110 MT of crude steel by
2019-2020. Nonetheless, with the current rate of ongoing Greenfield and Brownfield projects,
the Ministry of Steel has projected that these growth trends are likely to be exceeded and it is
envisaged that in the next five years demand will grow at higher annual average growth rate of
over 10 per cent as compared to around 7 per cent growth achieved between 1991-92 and 2005-

Moreover, according to the ministry, the crude steel production capacity in the country by
2011-12 will be nearly 124 MT.

According to the Ministry of Steel, 222 memorandum of understanding (MoUs) have

been signed with various states for planned capacity of around 276 MT. Major investment plans
are in Orissa, Jharkhand, Chhattisgarh, West Bengal, Karnataka, Gujarat and Maharashtra.

According to the Annual Report 2009-10 by the Ministry of Steel, domestic crude steel
production grew at a compounded annual growth rate of 8.6 per cent during 2004-2005 and


India's steel consumption rose 8 per cent in the year ended March 2010, over the same
period a year ago on account of improved demand from sectors like automobile, infrastructure
and housing. The country’s steel consumption increased to 56.3 MT in the 12 months to March
2010 from 52.3 MT in the previous year, as per the Ministry of Steel.


A host of steel companies have lined up major investment proposals. Furthermore, with
an expanding consumer market, the Indian steel industry is likely to receive huge domestic and
foreign investments.

The domestic steel sector has attracted a staggering investment of about US$ 238 billion,
according to the Minister of State for Steel, Mr. A. Sai Prathap.

This consists of nearly 222 MoUs signed between the investors and various state
governments mostly in the states of Orissa, Jharkhand, Chhattisgarh and West Bengal.

• SAIL is planning to set up a 12-million tone plant in Jharkhand.

• In December, India’s largest engineering conglomerate Larsen & Toubro (L&T) and
state-owned Nuclear Power Corporation of India Limited (NPCIL) formed a US$ 373.2
million joint venture for specialized steel and forging products.
• Stainless steel manufacturer and exporter, Varun Industries, is setting up a US$ 171.8
million stainless steel-cum-alloy steel plant at Rohat, Jodhpur.
• Tata Steel has entered into a joint venture with Japan’s Nippon Steel for production and
sales of automotive cold-rolled flat products at Jamshedpur. The JV is expected to invest
US$ 400 million to set up an automobile venture in India.
• Steel major, JSW Steel has earmarked a capex of US$ 1.6 billion for 2010-11 and plans
to increase capacity of its Bellary plant in Karnataka from 7 MT to 10 MT by end of

Government Initiative

As per the Press Information Bureau, during 2009, the government took a number of
fiscal and administrative steps to contain steel prices. Central value added tax (CENVAT) on
steel items was reduced from 14 per cent to 10 per cent with effect from February 2009.

Moreover, in the Union Budget 2010-11, the government has allocated US$ 37.4 billion
to the infrastructure sector and has increased the allocation for road transport by 13 per cent to
US$ 4.3 billion which will further promote the steel industry.

Exchange rate used

1 USD = 46.36 INR (as on February 2010)

1 USD = 44.42 INR (as on April 2010)


The company was started in November 2004. Its main branch is in Coimbatore. MR.R.
ELANGOVAN was the Managing Director of SHASTHA STEELS Private Limited. The
company is registered under the COMPANIES ACT 1956. The company has the ISO-9001-2008
and ISI certification. The company promises and fulfills Safety, Quality, Reliability, and
Strength. The company is situated in the New Industrial Development Area, Kanjikode,
Palakkad. The company is fully dedicated to the reinforcement for steel industries. The company
deals with the manufacturing of Cold Twisted Deformed Bars (CTD), Thermo Mechanical
Treated Bars (TMT), Mild Steel (MS) Flat, Mild Steel (MS) square. These are used for the
construction purpose. The important raw materials are steel ingots / billets are available in the
domestic market now. At present company is running very smoothly. The company has tight
hold in the market. The company is growing daily with the help of new technologies that are
introduced and used. The company has twenty staffs and forty four mill workers.










The important function of production department is production management. Production
means converting raw materials into finished products i.e. the main raw material is ingots/ billets

is used for the construction of steel. The target for one day is 100 MT, target they achieving is
93%. Output ratio is 100.93 which is equal to 93%. The rest of 7 and 3 percent are scrap and
burning loss respectively.

• Steel ingots used for rolling are loaded into reheating furnace to heat them to required
rerolling temperature.

• The heated steel ingots / billets then removed from the reheating furnace.

• The removed ingots or billets rolled in proposed oiling mill consisting of stand driven by
high capacity motors.

• The rolled bars in the mill will be coiled by using coiled machine.

• Each coil will recoil and cut it to twelve meters length.

• The cutting process is done by twisted machine.

• These twelve meters pieces are bundled and bended into twenty feet length.

• The entered caution will have the support of workshops.

Purchasing of goods or services of an organization or a business is to accomplish the
goals of an enterprise. Purchasing department will have responsibility for providing raw
materials, components and equipments which are necessary for the smooth functioning of the

organization. The staff of the purchase department is responsible for the selection of the
reputable, dependable suppliers.

• Requisitioning

• Financial Approval

• Market Assessment

• Purchase Decision

• Ordering

• Delivery

• Quality and Quantity Checking

• Receipting and Accounting

• Payment

The company has the ISo-9001-2008 and ISI certification which gives the quality
assurance. The strength of the company is the quality of the steel. When the quality of the steel
increases, its demand also increases. To check the quality and maintaining the quality is the

important function of this department. To check the quality of the steel quenching process has
been taking place.

Quenching process or water treatment is one of the important processes to check the quality
of the bars. The finished hot bar passes into the quenching boxes which sprays high pressure cold
water into the surface of the bars. There is online inspection system before going to the
quenching process it checks the heat of the bars. After this process the heat derivates, thus
increases the heat of the bars, it also check by online process through universal testing machine.

• Acceptance plan and testing of 100% raw materials supplies

• Continuous vendor evaluation

• Setting and control of quality standards for foregoing as per quality plan

• Strict implementation of established processes.

• Corrective and preventive actions implemented promptly for minimizing defects at 0


• Calibration and Maintenance of testing.

• Measuring and Thermal control equipments.

The company producing bars are used for construction purpose. Quality of this bars are
flexible, elevation, seismic forcement.


• Carbon - Maximum 0.03%

• Manganese - Minimum 0.50%

• Sulphur - Maximum 0.006%

• Phosphorous - Maximum 0.006%


• Fe 415 [0.5 Manganese]

• Fe 500 [0.6 Manganese]


• Fe 550 [0.7 and above manganese]

• High level of Manganese combination in the ingots increases the strength of the TMT

• Low level of carbon combination in the ingots increases the flexibility of the bars.

• Reduction of defect

• Helps in problem solving

• Continuous improvement

• Quality products through customer satisfaction

• It leads to cost saving and profitability improvements

The store department is responsible for maintain the raw materials, furnished materials
and other functional materials in the organization. The raw materials are purchased and stored in
the company. It will be used for marketing product at the necessary time. The main function of

this department is storing the raw materials. Minimum and maximum store stock is maintained in
the company. If the minimum stock comes down the company will raise the purchase requisition
and in form the purchase department for processing the materials.

Sales are done according to the need of the customer. Through the sales we can understand
the position of the firm in the market. Sales are the function of business concerned with the
creation of customer. Creation of customer means the identification of consumer needs and
organizing the business to meet the needs. The main activities involved in this department are:

• Receiving order from the customer by executives

• Enter the order to schedule entry and monitoring form

• Verifying the feasibility and availability of goods in the stock

• Sales activities are to be carried out by dispatch department

• Customer satisfaction in needed

• To obtain maximum sales

• To offer standard and best quality steel

• To satisfy customer needs by delivering the products in time

• To encourage the existing buyers to buy more and more

In this department the main function is to find out what the members of the community need
and how to provide maximum satisfaction to them. The main function of the marketing
department is how to meet the objective. According to the modern concept of marketing, a firm
makes a conscious and organized effort to find out what the members of community need and
how it can provide the maximum measures of satisfaction to them. In performing the marketing

function, a firm gears its organization and efforts to meet this objective. Thus the modern
concept of marketing focuses on the consumer and the satisfaction of his needs. That’s why
modern marketing is said to be ‘consumer-oriented’ in its approach. The process of marketing
management is

• Planning marketing activities

• Directing the implementations of the plans

• Controlling these plans

The other most important way of marketing the products is through the advertisement. The
major sales of construction of steel are occurred mostly during the season time. The main dealers
are wholesalers and retailers. Price varies according to the size and quality depending upon the
requirements. After sales service will greatly elide upon customer feedback. If there is any
damaged in the product, it can be replaced immediately. The main activities are:

• Receiving orders from customer by executives

• Enter the order to schedule entry and monitoring form

• Verifying the feasibility and availability of goods in stock

• Customer satisfaction.

Finance department is one of the important parts of the organization. It shows the
financial position of the firm. It is a fact that finance makes more money to the firm. It is the
pillar of the firm. Financial management is the managerial activity which s concerned with the
planning and controlling of the firm’s financial resources.

• Monthly accounting of Invoice

• Making proper Tax Payment

• Providing Discount

• Preparing and Maintaining proper accounts

• Retirement Benefits

• Salary Distribution


• Our own funds

• Loans from banks

• Internal financing


Human Resource means the process of bringing people and organizations together so that
the goals of each are met. Management means the utilization not only of the physical factors, but
what is still more important, of the people who are working on these factors. The importance of
human factors is increasingly recognized by those responsible for the management of the
industrial concerns. Good management means getting effective result with the people.

To select right people at right time at right place is the main function of human resource
manager. Human Resource Manager and Human Resource executive are in charge of Human
Resource Department in the organization. There are more than 100 employees in the
organization out of which 44 of them are technical employee’s factories. The labors are recruited
on a contract basis mostly migrated from the northern states as Bihar and Gujarat.

To utilize human resources in a effective manner

To ensure a good industrial relationship

To improve the productivity through proper training and development

To provide all welfare measurement to the employees

To provide social responsibility

To provide training and safety measures.


• RECRUIT new employees on the basis of their skill, expertise and knowledge

• Provide ORIENTATION training as per organizations requirements

• UPDATE employees name in employee roll register and other statutory documents

• IDENTIFY training needs with respect to nature of activities for all employees

• PREPARATION of training annual plan

• UPDATE employees’ personnel training record

• Collection of FEEDBACK from participants

• Suitable methods.


Wages and Salary

For an individual 75% as basic salary and 25% as housing rent allowance (HRA)

Labor Welfare Fund


This fund is provided only for the laborers. It is provided for the welfare of the laborers.
Employees pay an amount of Rs.4/- for this fund twice in a year. The company also deposits
double the total amount. If any problem comes to an employer based on the money they can
approach the labor welfare fund. If the problem genuine and acceptable they get some amount
from this fund.

Workers Education
The company gives training to the employees about new technologies whenever the
company introduces. The employees also get training twice in a month when there is any
deviation in achieving the daily or monthly target.

Festival Holidays
The company gives holidays for the festivals. The company list out needed festival
holidays according to the employees and submitted for the approval of labor welfare officers. If
the list of holidays gets the approval the company will follow these holidays. Every year the
company provides four national holidays and nine festival holidays.

Rules for the leave

The employee has to work eight hours per day, if the employee takes overtime he get
payment depend upon time taken for the overtime. If the employee takes leave on the working
days he will get wages according to the days the employer takes leave i.e. the employer wages
should be decreased according to the leaves taken. Suppose if the reason for the particular leave
is genuine the employer should get half the payment of those leaves. In the case of emergency
the employer should get casual leave. In those casual leave the employer earn only half the
payment. In a year only fifteen days are allowed for the casual leave.

Counseling Service
The company provides counseling based upon the age group. The employees get
counseling according to the experience. The company should provide fire and safety class once
in a year. All the employees should get first aid counseling also. The company should conduct
three types of inspection in every six months based on the safety measures.




The company should give two hours training once in a month based on the cleanliness.
Personal counseling should be given based on the role and responsibility. The company also
conduct skill matric test. The company also conduct meeting once in a month based upon the

Employee Motivational Programmed

The employees motivational programmed was done by the financial department. They
offer incentives. Incentives are based on the production. Incentive percentage is based upon the
grade of the workers.

Discipline should be for all the employees who are working in the company. There are
several instructions to be followed. It mainly focused on the working. Work should be allotted
for all it should be completed at the perfect time. Time keeping should be there. Checking the
safety measures are taking or not.

Domestic Enquiry
It’s mainly regarded with the safety requirement facilities and health.

Grievance Redressal System

The grievance cell contains members from the director board and members from each
department. Health problems, worksite problems insufficient of safety providing option, room
facilities, water facilities, wages etc. company mainly focused on the medical and safety

Personal Records Maintaining and Recording

It mainly keeps the company’s record and maintaining the personal records of all the
employees. The details of all the employees personal history, performance, leave character

If an employer works in the company for four years bonus will provide. If an employer
works more than one year he also gets the bonus. The difference between these two bonuses is

the employer who works more than four get the bonus of basic salary where as in the case of
above one year he gets only half the basic salary.

Recruitment and Selection Procedure

Recruitment and Selection are done based on the qualification and experience. For the
recruitment and selection they give advertisement in paper, friends and relatives, reliable
sources, interview call for, interview, selection, appointment by selection committee consists of
directors, factory in charge, office in charge, department in charge.

Security Department
This department is under the control of Human Resource. If any visitors or vehicles came
to the company the security will inform to the HR manager. At the time the HR manager will
refer the register of visitors and vehicles which maintained by him and allow.

Employee Voluntary- Retirement Scheme

If an employer who is working in the company, he can take the voluntary retirement. At
the time he only gets the ESI and PF benefits.

In the company promotion is done in the administrative level only. Promotion means the
person moves to the higher position from the current position.

The employee moves from one job to another job without involving any change in his
duties, responsibilities, skill, status and compensation. In the company, transfer is for the
employee level i.e. from one department to another department.

Provident Fund
Provident fund is meant for the economic welfare of the employees. Both the employer
and employee contribute to the fund. From the 12% of the salary of the employee and employer
3.67% goes to the PF fund.

I hereby concluded that the institutional training that I had done, gave me the
introduction about the companies environment. I learnt about practices and procedure of a

SHASTHAA STEELS PRIVATE LIMITED is having long and successful track record
in steel industry. The benefit available to the unit by the way of sales tax exemption availability
of power and others infrastructure will help the unit to improve its viability.

The mismatch between demand and supply to price volatility witnessed during recent
times. Stagnation in steel prices for long periods followed by sudden spurt affects the consumers

and infrastructure industry. Therefore, the efforts of various stakeholders to develop risk-hedging
instruments like futures and derivatives would be supported.

During my training period I gained more knowledge about the practical procedure and
also various other useful things related to my academic studies. This training gave me confidence
to confront any kind of situation of any organization.