Report of Intern Sail

STEEL AUTHORITY OF INDIA LTD. SCHOOL OF MANAGEMENT STUDIES, CUSAT

1

REPORT OF THE

SUMMER INTERNSHIP PROJECT

Done at

STEEL AUTHORITY OF INDIA LTD., COCHIN: 682031

Submitted to the School of Management Studies, Cochin University of

Science and Technology, Kochi - 22

In partial fulfilment of the requirements for the award of Degree of

MASTER OF BUSINESS ADMINISTRATION

(INTERNATIONAL BUSINESS)

By

ARUN R.

Reg.: 85413009

Organisation Guide: Mr Sunil Madhavan ( Sr. Manager (Marketing),

steel Authority Of India Ltd.

Faculty Guide: Dr. K. Krishnan Nampoothiri, Associate Professor,

School Of Management Studies.

School of management Studies

August - 2014


2

DECLARATION

I, hereby declare that this report of the Internship done at the STEEL

AUTHORITY OF INDIA LTD. (SAIL), my original work. I further declare that

this report is based on the information collected by me and has not previously

been submitted to academic/ non- academic purposes.

ARUN R.

(Reg. No. 85413042) Place: Cochin MBA (International Business) III rd. Semester

Date: School Of Management Studies Cochin University of Science and Technology

Kochi –682022


3

CERTIFICATE

This is to certify that the report of the internship titled “Report of the internship done at

STEEL AUTHORITY OF INDIA LTD.” is a bonafide record of the work done by

Arun R. during June – July 2014 in partial fulfillment of the requirements for the award of

the Degree of Master of Business Administration of the Cochin University of Science and

Technology.

Dr. K. KRISHNAN NAMPOOTHIRI

Associate Professor

School Of Management Studies

(Faculty Guide)

Director

School Of Management Studies


4

Acknowledgement

It is great pleasure for me to acknowledge the kind of help and guidance

received to me during my project work. I was fortunate enough to get support

from a large number of people to whom I shall always remain grateful.

I sincerely thank Mr SUNIL MADHAVAN( Sr. Manager (Marketing)),Mr

G.RAJESH(Sr. OS)and SMT.BEENA MATHEW(OS), Persons of amiable

personality, for assigning such a challenging project work which has enriched

my work experience and getting me acclimatized in a fit and final working

ambience in the premises of Steel Authority of India Limited (SAIL).

I extend my sincere gratitude to Prof Dr M Bhasi, Director SMS, CUSAT for

giving this opportunity of organization study.

I acknowledge my gratitude to Dr. K. Krishnan Nampoothiri, Assistant

Professor, for his extended guidance, encouragement, support and reviews and

without whom this project would not have been a success.

Last but not the least I would like to extend my thanks to all the employees of

Steel Authority of India Limited (SAIL) for their cooperation, valuable

information and feedback during my project.

ARUN.R


5

TABLE OF CONTENTS

Chapter Title Page No

1 INTRODUCTION 7

Introduction 8

2 STEEL INDUSTRY IN INDIA – AN OVERVIEW 11

3 ORGANISATION PROFILE 14

Company Profile 15

About the company 17

Major units 19

Joint ventures 19

About Metal Junction 21

Major player of steel in India 31

Products 36

4 ORGANIZATION CHART 38

DEPARTMENT 39

Central Marketing organization 40

Function of Branches 43

Functions of marketing Department 44

Marketing activities of SAIL 44

Central sales department 45

About warehouse 46

Advertising in branch sales of SAIL 47

Policies of marketing 47

Pricing policies and sales procedure 48

Distribution 51

Channel 51

Sales promotion 51

Marketing strategies 52

Building customer relationship 53

Market development 53

Production according to market needs 54

Stock reduction 54

Price fixation 54

Dispatch 54


6

Documentation 54

Channel distribution 55

Function of distribution channel 55

Function of stockyard 56

Raw material division 57

Central coal supply organization 57

Process flow-chart branch sales office 59

Process flow-chart for delivery operation 60

Conclusion 61


7

CHAPTER -1

INTRODUCTION


8

INTRODUCTION

The project on comparison of financial statement of SAIL with other steel sectors

in India has been a very good experience. Every manufacturing company faces

the problem of Financial Management in their day to day processes. An

organization’s cost can be reduced and the profit can be increased only if it is able

to manage the financial position of its firm. At the same time the company can

provide customer satisfaction and hence can improve their overall productivity

and profitability.

This project is a sincere effort to study and analyze the Financial Management of

SAIL and its competitors. The project work was divided into two phases. The first phase was focused on company profile of SAIL, Tata Steel and JSW Steel

on the bases on Background, Business Description, Marketing and Distribution

Network, CSR Initiatives, etc. and the second phase was conducted a

Comparative analysis of SAIL with its competitors TATA Steel and JSW Steel on the bases of Production Performance, Financial Performance, Ratio Analysis,

Segmental Break- up and Analysis of Cost and GSR/NSR.

The internship is a bridge between the institute and the organization. This made

me to be involved in a project that helped me to employ my theoretical knowledge

about how the Analysis of Financial Statement is done by the firm. And in the

process I could contribute substantially to the organization’s growth. The

experience that I gathered over the past two months has certainly provided the

orientation, which I believe will help me in shouldering any responsibility in

future.


9

OBJECTIVES OF THE INTERNSHIP

The present internship is carried out in STEEL AUTHORITY OF INDIA LTD.

with the following specific objectives.

To study the organizational structure of STEEL AUTHORITY OF INDIA LTD. SAIL).

To familiarize the departments of STEEL AUTHORITY OF INDIA LTD. (SAIL)

and its functions.


10

CHAPTER - 2

INDUSTRY ANALYSIS


11

STEEL INDUSTRY IN INDIA – AN OVERVIEW

Steel has been the key material with which the world has reached to a developed

position. All the engineering machines, mechanical tools and most importantly

building and construction structures like bars, rods, channels, wires, angles etc

are made of steel for its feature being hard and adaptable. Earlier when the alloy

of steel was not discovered, iron was used for the said purposes but iron is

usually prone to rust and is not so strong. Steel is a highly wanted alloy over the

world. All the countries need steel for the infrastructural development and

overall growth. Steel has a variety of grades i.e. above 2000 but is mainly

categorized in divisions – steel flat and steel long, depending on the shape of

steel manufactured. Steel flat includes steel products in flat, plate, sheet or strip

shapes. The plate shaped steel products are usually 10 to 200 mm and thin

rolled strip products are of 1 to 10 mm in dimension. Steel flat is mostly used in

construction, shipbuilding, pipes and boiler applications. Steel long Category

includes steel products in long, bar or rod shape like reinforced rods made of

sponge iron. The steel long products are required to produce concrete, blocks,

bars, tools, gears and engineering products. After independence, successive

governments placed great emphasis on the development of an Indian steel

industry. In Financial Year 1991, the six major plants, of which five were in the

public sector, produced 10 million tons. The rest of India steel production, 4.7

million tons, came from 180 small 29 plants, almost all of which were in the

private sector. India's Steel production more than doubled during the 1980s but

still did not meet the demand in the mid-1990s, the government was seeking

private-sector investment in new steel plants. Production was projected to

increase substantially as the result of plans to set up a 1 million ton steel plant

and three pig- iron plants totalling 600,000 tons capacity in West Bengal, with

Chinese technical assistance and financial investment. The commissioning of

Tata Iron & Steel Company's production unit at Jamshedpur, Bihar in 1911-12

heralded the beginning of modern steel industry in India. At the time of

Independence in 1947 India's steel production was only 1.25 Mt of crude steel.

Following independence and the commencement of five year plans, the

Government of India decided to set up four integrated steel plants at Rourkela,

Durgapur, Bhilai and Bokaro. The Bokaro plant was commissioned in 1972.

The most recent addition is a 3 Mt integrated steel plant with modern

technology at Visakhapatnam. Steel Authority of India (SAIL) accounts for

over 40% of India's crude steel production. SAIL comprises of nine plants,

including five integrated and four special steel plants. Of these one was


12

nationalized and two were acquired; several were set up in collaboration with

foreign companies. SAIL also owns mines and subsidiary companies.

DEMAND OF STEEL IN INDIA

Driven a booming economy and concomitant demand levels, consumption

of steel has grown by 12.5 per cent during the last three years, well above the

6.9 percent envisaged in the National Steel Policy. Steel consumption amounted

to 58.45 mt in 2006-07 compared to 50.27 mt in 2005-06, recording a growth

rate of 16.3 per cent, which is higher than the world average. During the first

half of the current year, steel consumption has grown by 16 per cent. A study

done by the Credit Suisse Group says that India's steel consumption will

continue to grow by 17 per cent annually till 2012, fuelled by demand for

construction projects worth US$ 1 trillion. The scope for raising the total

consumption of steel in the country is huge, as the per capita steel consumption

is only 35 kgs compared to 150 kg in the world and 250 kg in China. With this

surge in demand level, steel producers have been reporting encouraging results.

For example, the top six companies, which account for 70 percent of the total

production capacity, have recorded a year-on-year growth rate of 13.4 per cent,

15.7 per cent and 11.7 per cent in net sales, operating profit and net profit,

respectively, during the second quarter of 2007-08 We expect strong demand

growth in India over the next five years, driven by a boom in construction

(43%-plus of steel demand in India).

SUPPLY OF STEEL IN THE INDIAN MARKET

Over the past ten years India‘s crude steel output rose nearly 7%per year to

55.3 million tons, while global crude steel output increased by 4% (Germany

managed an increase of just under 1%p.a.) Although India is the world‘s eighth

largest steel producer, its3%-plus share of global steel output is still very low; it

is roughly the same as Ukraine‘s share of world steel production. China, the

world‘s biggest steelmaker, produces nearly ten times as much as India. In 2005

India‘s crude steel output of 46.5 million tons was 8%higher than in 2004; only

in China was the growth rate considerably higher at 15%. By contrast,

production volumes fell in the US and the EU-25 by nearly 5% and roughly 4%

respectively. In the first five months of 2006 Indian steel production continued

to expand unabated, rising 10% yoy. We forecast a significant increase in output

by the Indian steel industry over the medium term. The entire industry‘s

contribution to gross domestic product should rise in the coming years to more

than 30% – compared to just fewer than 27% at present. The growth drivers are


13

the expanding client industries automotive engineering (production up 16% p.a.

between 2000 and 2005), mechanical engineering (up 10% p.a.) and

construction (up 6% p.a.).


14

CHAPTER - 3

ORGANISATION PROFILE


15

COMPANY PROFILE

Steel has been the key material with which the world has reached to a

developed position. All the engineering machines, mechanical tools and most

importantly building and construction structures like bars, rods, channels, wires,

angles etc. are made of steel for its feature being hard and adaptable. Earlier when

the alloy of steel was not discovered, iron was used for the said purposes but iron

is usually prone to rust and is not so strong. Steel is a highly wanted alloy over

the world. All the countries need steel for the infrastructural development and

overall growth. Steel has a variety of grades i.e. above 2000 but is mainly

categorized in divisions – steel flat and steel long, depending on the shape of steel

manufactured. Steel flat includes steel products in flat, plate, sheet or strip shapes.

The plate shaped steel products are usually 10 to 200 mm and thin rolled strip

products are of 1 to 10 mm in dimension. Steel flat is mostly used in construction,

shipbuilding, pipes and boiler applications. Steel long Category includes steel

products in long, bar or rod shape like reinforced rods made of sponge iron. The

steel long products are required to produce concrete, blocks, bars, tools, gears and

engineering products. After independence, successive governments placed great

emphasis on the development of an Indian steel industry. In Financial Year 1991,

the six major plants, of which five were in the public sector, produced 10 million

tons. The rest of India steel production, 4.7 million tons, came from 180 small

plants, almost all of which were in the private sector. India's Steel production

more than doubled during the 1980s but still did not meet the demand in the mid-

1990s, the government was seeking private-sector investment in new steel plants.

Production was projected to increase substantially as the result of plans to set up

a 1 million ton steel plant and three pig-iron plants totalling 600,000 tons capacity

in West Bengal, with Chinese technical assistance and financial investment. The

commissioning of Tata Iron & Steel Company's production unit at Jamshedpur,

Bihar in 1911-12 heralded the beginning of modern steel industry in India. At the


16

time of Independence in 1947 India's steel production was only 1.25 Mt of crude

steel. Following independence and the commencement of five year plans, the

Government of India decided to set up four integrated steel plants at Rourkela,

Durgapur, Bhilai and Bokaro. The Bokaro plant was commissioned in 1972. The

most recent addition is a 3 Mt integrated steel plant with modern technology at

Visakhapatnam. Steel Authority of India (SAIL) accounts for over 40% of India's

crude steel production. SAIL comprises of nine plants, including five integrated

and four special steel plants. Of these one was nationalized and two were

acquired; several were set up in collaboration with foreign companies. SAIL also

owns mines and subsidiary companies.


17

ABOUT THE COMPANY


18

STEEL AUTHORITY OF INDIA LIMITED

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, automotive and defence industries and for sale in export markets. SAIL is also among the seven

Maharatnas of the country's Central Public Sector Enterprises.

SAIL manufactures and sells a broad range of steel products, including hot and

cold rolled sheets and coils, galvanised sheets, electrical sheets, structural, railway products, plates, bars and rods, stainless steel and other alloy steels. SAIL

produces iron and steel at five 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. The company has the distinction of being India’s second

largest producer of iron ore and of having the country’s second largest mines

network. This gives SAIL a competitive edge in terms of captive availability of iron ore, limestone, and dolomite which are inputs for steel making.

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 Organisation (CMO) that transacts business

through its network of 37 Branch Sales Offices spread across the four regions, 25

Departmental Warehouses, 42 Consignment Agents and 27 Customer Contact

Offices. CMO’s domestic marketing effort is supplemented by its ever widening network of rural dealers who meet the demands of the smallest customers in the

remotest corners of the country. With the total number of dealers over 2000,

SAIL's wide marketing spread ensures availability of quality steel in virtually all the districts of the country.

SAIL's International Trade Division ( ITD), in New Delhi- an ISO 9001:2000

accredited unit of CMO, undertakes exports of Mild Steel products and Pig Iron

from SAIL’s five integrated steel plants. 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 Organisation at Ranchi. Our captive mines are under the control of the

Raw Materials Division in Kolkata. The Environment Management Division and

Growth Division of SAIL operate from their headquarters in Kolkata. Almost all

our plants and major units are ISO Certified.


19

MAJOR UNITS

Integrated Steel Plants

Bhilai Steel Plant(BSP) in Chhattisgarh

Durgapur Steel Plant (DSP) in West Bengal

Rourkela Steel Plant(RSP) in Orissa

Bokaro Steel Plant(BSL)in Jharkhand

IISCO Steel Plant (ISP) in West Bengal

Special Steel Plants

Alloy Steels Plants (ASP) in West Bengal

Salem Steel Plant (SSP) in Tamil Nadu

Visvesvaraya Iron and Steel Plant (VISL) in Karnataka

Ferro Alloy Plant

Chandrapur Ferro Alloy Plant

Subsidiary

SAIL Refractory Company Limited

JOINT VENTURES

NTPC SAIL Power Company Pvt.Limited (NSPCL):

A 50:50 joint venture between Steel Authority of India Ltd (SAIL) and National Thermal Power Corporation Ltd (NTPC Ltd); manages SAIL’s

captive power plants at Rourkela, Durgapur and Bhilai with a combined

capacity of 814 megawatts (MW).

Bokaro Power Supply Company Pvt. Limited (BPSCL): This 50:50 joint venture between SAIL and the Damodar Valley Corporation (DVC) is managing the

302-MW power generating station and 660 tonnes per hour steam generation

facilities at Bokaro Steel Plant. Mjunction Services Limited: A 50:50 joint venture between SAIL and Tata

Steel; promotes e-commerce activities in steel and related areas. It’s newly

added services include e-assets sales, events & conferences, coal sales &

logistics, publications, etc. SAIL-Bansal Service Centre Limited: A joint venture with BMW Industries Ltd.

on 40:60 basis for a service centre at Bokaro with the objective of adding

value to steel. Bhilai JP Cement Limited: A joint venture company with Jaiprakash

Associates Ltd on 26:74 basis to set up a 2.2 million tonne (MT) slag-based

cement plant at Bhilai.


20

Bokaro JP Cement Limited: Another joint venture company with Jaiprakash

Associates Ltd on 26:74 basis to set up a 2.1 MT slag-based cement plant at Bokaro.

SAIL & MOIL Ferro Alloys (Pvt.) Limited : A joint venture company with

Manganese Ore (India) Ltd on 50:50 basis to produce Ferro-manganese and

silico-manganese required in production of steel. S & T Mining Company Pvt. Limited: A 50:50 joint venture company with Tata

Steel for joint acquisition & development of mineral deposits; carrying out

mining of minerals including exploration, development, mining and beneficiation of identified coking coal blocks.

International Coal Ventures Private Limited: A joint venture company/SPV

promoted by five central PSUs, viz. SAIL, CIL, RINL, NMDC and NTPC

(with respectively 28.7%, 28.7%, 14.3%, 14.3% and 14.3% shareholding) aiming to acquire stake in coal mines/blocks/companies overseas for

securing coking and thermal coal supplies.

SAIL SCI Shipping Pvt. Limited: A 50:50 joint venture with Shipping Corporation of India for provision of various shipping and related services

to SAIL for importing of coking coal and other bulk materials and other

shipping-related business.

SAIL RITES Bengal Wagon Industry Pvt. Limited: A 50:50 joint venture with RITES to manufacture, sell, market, distribute and export railway wagons,

including high-end specialised wagons, wagon prototypes, and fabricated

components/parts of railway vehicles, rehabilitation of industrial

locomotives, etc., for the domestic market. SAIL SCL Limited: A 50:50 JV with Government of Kerala where SAIL has

management control to revive the existing facilities at Steel Complex Ltd,

Calicut and also to set up, develop and manage a TMT rolling mill of 65,000 MT capacity along with balancing facilities and auxiliaries.


21

ABOUT METAL JUNCTION

Corporations across the world have realized that in a world without boundaries,

certain regions and people with distinct competencies will be more efficient

than others and therefore the visible trend in the world today is outsourcing.

Companies are outsourcing manufacturing activities, customer services, back

office operations and a host of other activities, either because there is someone

else who can do the same thing for less, or, there is specialist who can offer

services of higher quality. Industry has recognized that whilst it has to

concentrate on growth, a prerequisite is to become globally competitive.

Industry has to, on the one hand, concentrate on its core competencies of

bringing about efficiencies in manufacturing and on the other hand look at

bringing about efficiencies in their Supply Chain which is their buying and

selling processes. Metal-junction operates at the extreme ends of the value chain

and hence it was essential to segregate the organization into two Major Business

Units (Commerce-junction and Metal-junction) so as to independently focus on:

Specific requirement of clients and customer

Specific procedure for both functions

Knowledge and information for two systems


22

MAJOR PLAYERS OF STEEL IN INDIA:

1. Public Sector (A) Steel Authority of India Limited (SAIL) Steel Authority of India Limited (SAIL) is a company registered under the Indian

Companies Act, 1956 and is an enterprise of the Government of India. It has five

integrated steel plants at Bhilai (Chattisgarh), Rourkela (Orissa), Durgapur (West

Bengal), Bokaro (Jharkhand) and Burnpur (West Bengal). SAIL has three special

and alloy steel plants viz. Alloy Steels Plant at Durgapur (West Bengal), Salem

Steel Plant at Salem (Tamilnadu) and Visvesvaraya Iron & Steel Plant at

Bhadravati (Karnataka). In addition, a Ferro Alloy producing plant Maharashtra

Electros melt Ltd. at Chandrapur, is a subsidiary of SAIL. SAIL has Research &

Development Centre for Iron & Steel (RDCIS), Centre for Engineering &

Technology (CET), SAIL Safety Organisation (SSO) and Management Training

Institute (MTI) all located at Ranchi; Central Coal Supply Organisation (CCSO)

at Dhanbad; Raw Materials Division (RMD), Environment Management

Division (EMD) and Growth Division (GD) at Kolkata. The Central Marketing

Organisation (CMO), with its headquarters at Kolkata, coordinates the country-

wide marketing and distribution network.

(B) RASHTRIYA ISPAT NIGAM LTD. (RINL)

RINL, the corporate entity of Visakhapatnam Steel Plant (VSP) is the first

shore based integrated steel plant located at Visakhapatnam in Andhra Pradesh.

The plant was commissioned in August 1992 with a capacity to produce 3 million

tonne per annum (mtpa) of liquid steel. The plant has been built to match

international standards in design and engineering with state-of- the- art

technology incorporating extensive energy saving and pollution control

measures. Right from the year of its integrated operation, VSP established its

presence both in the domestic and international markets with its superior quality

of products. The company has been awarded all the three International standards

certificates, namely, ISO 9001:2000, ISO 14001: 1996 and OHSAS 18001: 1999.


23

RINL was accorded the prestigious Mini Ratna‘ status by the Ministry of Steel,

Govt. of India in the year 2006 and the company is gearing up to complete the

ambitious expansion works to increase the capacity to 6.3 mtpa by 2009. RINL

has prepared a road map to expand the plant‘s capacity up to 16 mtpa in phases.

(C) Metal Scrap Trade Corporation Ltd. (MSTC) MSTC Ltd. (formerly Metal Scrap Trade Corporation Ltd.) was set up on the 9th

September, 1964 as a canalizing agency for the export of scrap from the country.

With the passage of time, the company emerged as the canalizing agency for the

import of scrap into the country. Import of scrap was de-canalized by the

Government in 1991-92 and MSTC has since then moved on to marketing ferrous

and miscellaneous scrap arising out of steel plants and other industries and

importing Coal, Coke, Petroleum products, semi-finished steel products like HR

Coils and export primarily Iron ore. The Company has also established an e-

auction portal and undertakes e-auction of Coal, Diamonds and Steel Scrap and

has developed an e-procurement portal in house.

(D) Ferro Scrap Nigam Ltd. (FSNL)

FSNL is a wholly owned subsidiary of MSTC Ltd. with a paid up capital of

Rs. 200 lakh. The Company undertakes the recovery and processing of scrap from

slag and refuse dumps in the nine steel plants at Rourkela, Burnpur, Bhilai,

Bokaro, Visakhapatnam, Durgapur, Dolvi, Duburi&Raigarh. The scrap recovered

is returned to the steel plants for recycling/ disposal and the Company is paid

processing charges on the quantity recovered at varying rates depending on the

category of scrap. Scrap is generated during Iron & Steel making and also in the

Rolling Mills. In addition, the Company is also providing Steel Mill Services such

as Scarfing of Slabs, Handling of BOF Slag, etc.


24

(E) Hindustan Steelworks Construction Ltd. (HSCL)

HSCL was incorporated in June 1964 with the primary objective of creating

in the Public Sector an organization capable of undertaking complete construction

of modern integrated Steel Plants. HSCL had done the construction work of

Bokaro Steel Plant, Vizag Steel Plant and Salem Steel Plant from the inception

till commissioning and was associated with the expansion and modernization of

Bhilai Steel Plant, Durgapur Steel Plant, IISCO (Burnpur) and also Bhadravati

Steel Plant. With the tapering of construction activities in Steel Plants,the

company intensified its activities in other sectors like Power, Coal, Oil and Gas.

Besides this, HSCL diversified in Infrastructure Sectors like Roads/Highways,

Bridges, Dams, Underground Communication and Transport system and

Industrial and Township Complexes involving high degree of planning, co-

ordination and modern sophisticated techniques. The company has developed its

expertise in the areas of Piling, Soil investigation, Massive foundation work, High

rise structures, Structural fabrication and Erection, Refractory, Technological

structures and Pipelines, Equipment erection, Instrumentation including testing

and commissioning. The company has also specialized in carrying out Capital

repairs and Rebuilding work including hot repairs of Coke Ovens and Blast

Furnaces and other allied areas of Integrated Steel Plants.

(F) MECON LTD.

MECON is one of the leading multi-disciplinary design, engineering,

consultancy and contracting organization in the field of iron & steel, chemicals,

refineries & petrochemicals, power, roads & highways, railways, water

management, ports &harbours, gas & oil, pipelines, nonferrous, mining, general

engineering, environmental engineering and other related/ diversified areas with

extensive overseas experience. MECON, an ISO: 9001- 2000 accredited

company, registered with World Bank (WB), Asian Development Bank (ADB),

European Bank for Reconstruction and Development (EBRD), African

Development Bank (AFDB), and United Nations Industrial Development


25

Organization (UNIDO), has wide exposure and infrastructure for carrying out

engineering, consultancy and project management services for mega projects

encompassing architecture & town planning, civil works, structural works,

electric, air conditioning & refrigeration, instrumentation, utilities, material

handling & storage, computerization etc. MECON has collaboration agreements

with leading firms from the USA, Germany, France, Italy, Russia, etc. in various

fields. The authorized share capital of the company is Rs. 10,400 lakh (previous

year Rs. 4,100 lakh) against which the paid up capital is Rs. 10,313.84 lakh

(previous year Rs. 4,013.84 lakh). All the shares are held by the Government of

India.

2. Private Sector

The private sector of the Steel Industry is currently playing an important and

dominant role in production and growth of steel industry in the country. Private

sector steel players have contributed nearly 67% of total steel production of 38.08

million tonnes to the country during the period April-December, 2007. The

private sector units consist of both major steel producers on one hand and

relatively smaller and medium units such as Sponge iron plants, Mini Blast

Furnace units, Electric Arc Furnaces, Induction Furnaces, Rerolling Mills, Cold-

rolling Mills and Coating units on the other. They not only play an important role

in production of primary and secondary steel, but also contribute substantial value

addition in terms of quality, innovation and cost effective.

(A)TATA STEEL LTD.

Tata Steel has an integrated steel plant, with an annual crude steel making

capacity of 5 million tonnes located at Jamshedpur, Jharkhand. Tata Steel has

completed the first six months of fiscal 2007-08 with impressive increase in its

hot metal production. The hot metal production at 2.76 million tonnes is

4.6%more compared to the corresponding period of the previous year. The crude

steel production during the period was 2.43 million tonnes which is marginally

lower than the production of 2.45 million tonnes last year. The saleable steel


26

production was at a lower level during the period April September, 2007 (2.34

million tonnes) compared to the corresponding period of last year (2.36 million

tonnes). Tata Steel is continuing with its programme of expansion of steel making

capacity by 1.8 million tonnes to reach a rated capacity of 6.8 million tonnes. The

Project is reported to be moving ahead of schedule and is likely to be

commissioned by May 2008 against the original schedule of June 2008. The

Company has planned to take the capacity to 10 million tonnes by the fiscal year 2010. Tata Steel‘s Greenfield projects in Orissa and Chattisgarh are progressing

on schedule with placement of equipment order for Kalinganagar Project in

Orissa and commencement of the land acquisition process. Jharkhand Project is

awaiting announcement of Relief & Rehabilitation policy of the State

Government. (B)ESSAR STEEL LTD.

Essar Steel Holdings Ltd. (ESHL) is a global producer of steel with a footprint

covering India, Canada, USA, the Middle East and Asia. It is a fully integrated

flat carbon steel manufacturer—from iron ore to ready-to-market products. ESHL

has a current global capacity of 8 million tonnes per annum (MTPA). With its

aggressive expansion plans in India and other parts of Asia and North America,

its capacity is likely to go up to 25 MTPA by2012. Its products find wide

acceptance in highly discerning consumer sectors, such as automotive, white

goods, construction, engineering and shipbuilding. Essar Steel Ltd., the Indian

Company of Essar Steel Holdings Limited, is the largest steel producer in western

India, with a current capacity of 4.6 MTPA at Hazira, Gujarat, and plans to

increase this to 8.5 MTPA. The Indian operations also include an 8 MTPA

beneficiation plant at Bailadilla, Chattisgarh which has world‘s largest slurry pipeline of 267 km to transport beneficiated Iron Slurry to the pellet plant, and an 8 MTPA pellet complex at Visakhapatnam.

The Essar Steel Complex at Hazira in Gujarat, India, houses the world‘s largest gas-based single

location sponge iron plant, with a capacity of 4.6 MTPA. The complex also


27

houses the steel plant and the 1.4 MTPA cold rolling complexes. The steel

complex has a complete infrastructure setup, including a captive port, lime plant

and oxygen plant. Essar Steel produces highly customized value-added products

catering to a variety of product segments and is India‘s largest exporter of flat

products, selling close to half of its production to the highly demanding US and

European markets, and to the growing markets of South East Asia and the Middle

East. The company‘s products conform to quality specifications of international

quality certification agencies, like ABS, API, TUV Rhine Land and Lloyd‘s

Register. Essar Steel is the first Indian steel company to receive an ISO 9001 and ISO 14001 certification for

environment management practices. Essar Steel utilizes Hot Briquetted Iron-

Direct Reduced Iron (HBIDRI) technology supplied by Midrex Technology, USA

along with four 150 tonnes DC electric arc furnaces imported from Clecim,

France. The Hazira unit of Essar Steel is equipped with 5.5 million tonnes per

annum (MTPA) hot briquetted iron plant, 4.6 MTPA electric are furnace, 4.6

MTPA continuous caster, 3.6 MTPA hot strip mill and 1.4 MTPA Cold Rolling

Mill. During the year 2007-08, Essar was awarded costs ISO/TS 16949 and

OHSAS 18000 certification.

(C) JSW STEEL LTD.

JSW Steel is a 3.8 MTPA integrated steel plant, having a process route

consisting broadly of Iron Ore Beneficiation – Pelletisation – Sintering – Coke

making – Iron making through Blast Furnace as well as Corex process – Steel

making through : BOF- Continuous Casting of slabs – Hot Strip Rolling – Cold Rolling Mills. JSW Steel has a distinction of being certified for ISO-9001:2000

Quality Management System, ISO-14001:2004 Environment Management

System and OHSAS 18001:1999 Occupational Health and Safety Management

System. The capacity as on 1.11.2007 stood at 3.8 MTPA and the capacity is

likely to rise to 6.8 MTPA by 2008, and further to 9.6 MTPA by 2010.


28

(D) JINDAL STEEL & POWER LTD. (JSPL)

Jindal Steel & Power Limited is one of the fast growing major steel units in

the country. The Raigarh plant of JSPL has a present capacity of 1.37 million

tonne per annum (MTPA) sponge iron plant, 2.40 MTPA Steel Melting Shop

(SMS), 1.0 MTPA plant Mill, 2.30 sinter plant, 0.8 MTPA coke oven and a 330

Mega Watt captive power plant. During the year 2006-07, the company produced

1.19 million tonnes of sponge iron, 0.8 million tonnes of various steel products,

0.57 million tonnes of hot metal and 0.21 million tonnes of rolled products. The

performance of JSPL during April-October 2007-08 was 0.68 million tonnes of

sponge iron, 0.72 million tonnes of steel products (slabs/blooms/billets/rounds),

0.68 million tonnes of hot metal, 0.27 million tonnes of rolled products and 0.11

million tonnes of plates

( E) ISPAT INDUSTRIES LTD. (IIL)

IIL has set up one of the largest integrated steel plants in the private sector in

India at Dolvi in Raigad District, Maharashtra with a capacity to manufacture 3

million tonnes per annum of hot rolled steel coils (HRC). The Dolvi complex also

boasts of an ultra modern blast furnace (setup by a group company Ispat Metallics India Ltd.) capable of producing 2.0 million tonnes per annum of Hot

Metal/ Pig Iron, a 2.0 million tonnes capacity Sinter Plant (newly commissioned)

and a DRI plant with a capacity of 1.6 million tonnes per annum. The complex

boast of an ultra modern captive jetty which meets the plants‘ requirement with

regard to import of various raw material. In the coming years, after augmenting

necessary infrastructure facility, it has planned to export the goods from the

captive jetty. Further, the complex envisages adding a 110 MW captive power

plant (which will use the Blast Furnace gas) in near future. The integrated steel plant is using the converter-cum-electric arc furnace route

(CONARC process) for producing steel. In this project, IIL have uniquely

combined the usage of hot metal and DRI (sponge iron) in the electric arc furnace

for production of liquid steel for the first time in India. For casting and rolling of

liquid steel, IIL has the state-of-the art technology called compact strip


29

production (CSP) process, which was installed for the first time in India and

produces high quality and specifically very thin gauges of Hot Rolled Coils.


30

Market Share of Leading Players in Iron and Steel Industry

COMPANY PRODUCTION OF MARKET SHARE(IN

STEEL (IN MILLION PERCENTAGE TERMS)

TONNES)

SAIL 13.5 32%

TISCO 5.2 11%

RNIL 3.5 8%

ESSAR,ISPAT,JSWL 8.4 19%

OTHERS 14.5 30%

TOTAL 45.1 100%


31

PRODUCTS

SAIL’S MAJOR PRODUCTS

SAIL has a wide range of steel products - both Long and Flat.

Among Long products are: Structurals, Crane Rails, Bars, Roads &Rebars, and

Wire Rods; and Flat products covering the range of HR Coils, Sheets & Skelp,

Plates, CR Coils & Sheets, GC Sheets/GP Sheets and Coils, Tinplates,

Electrical Steel. SAIL also produces Tubular products and Railway products

such as rails, wheels, axles and wheel sets.

Other products of SAIL include Pig iron and Fertilizers such as Calcium

Ammonium Nitrate ("Sona"), Ammonium Sulphate ("Raja") and Coal

Chemicals like Benzene, Toluene, Xylene etc.


32

Plant Wise

BOKARO STEEL PLANT HR Coils & Sheets

Plates

CR Coils & Sheets

GP Sheets & Coils/ GC Sheets

Pig Iron, Chemicals & Fertilizers

DURGAPUR STEEL PLANT Blooms, Billets & Slabs

Joists, Channels, Angles

Bars, Rods &Rebars

Skelp

Product Wise

Semis Blooms, Billets & Slabs

Long Products Structural

Crane Rails

Bars, Rods &Rebars

Wire Rods

Flat Products HR Coils, Sheets & Skelp

Plates

CR Coils & Sheets

GC Sheets\ GP Sheets and Coils

Tin plates

Electrical Steel

Tubular Products Pipes

Railway Products Rails

Wheels, Axles, Wheel Sets


33

Wheels, Axles, Wheel Sets Pig Iron,

Chemicals & Fertilizers

ROURKELA STEEL PLANT HR Coils

Plates

CR Coils & Sheets

GP Sheets/ GC Sheets

Tinplates

Electrical Steel

Pipes


BHILAI STEEL PLANT

Blooms, Billets & Slabs Beams

Channels, Angles

Crane Rails

Plates

Rails



34

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 equipment 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 processing. 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.


35

PLATES

Steel plates are used mainly for the manufacture of

bridges, steel structures, ships, large diameter pipes,

storage tanks, boilers, railway wagons and pressure

vessels. 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 than hot 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, galvanizing and tinning. The company also produces further

processed cold rolled products, including galvanized sheets and tin plates.


36

STRUCTURALS

Structural steel products are produced through a

process of hot rolling in the section or structural

mills. They are long steel products with cross

sections of various shapes. I-beams, channels and

angle steel are used in mining, the construction of

tunnels, factory structures, transmission towers,

bridges, ships railways and other infrastructure projects.

BARS AND RODS

The company produces steel bars and rods through a process of hot rolling billets

in the finishing mills. Reinforcement steel 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.

SPECIALITY PRODUCTS

Speciality products include electrical sheets, tin

plates and pipes. Electrical sheets are cold rolled

products of silicon steel for electrical machinery.

Tin plates are cold rolled steel electrolytically

coated with tin for food packaging. Pipes are

longitudinally or spirally welded from hot rolled coils for conveying such things

as water, oil and gas.


37

ALLOY AND STAINLESS PRODUCTS

In addition to the steel products indicated above, SAIL produces a wide range of

alloy steel products at ASP, SSP and VISL. Elements including chromium,

nickel, vanadium and molybdenum are used in the alloy mixture to impart special

properties to steel. These alloy steels are primarily used for sophisticated

applications, including in the automobile, railway and defense industries.

A wide variety of alloy and stainless steel plates, hot rolled sheets, cold rolled

sheets, bars, billets, blooms, forgings and die blocks are manufactured at ASP in

an Electric Arc Furnace. SAIL is able to produce different qualities of alloy steels

to meet the requirements of its customers. To increase steel's corrosion resistance

properties, nickel and chromium are used in the making of stainless steel. SSP

produces cold rolled stainless steel coils and sheets with thickness ranging from

0.3 mm to 6 mm and width ranging from 500 mm to 1,250 mm. These materials

can be produced in a large number of grades for different applications. Stainless

steel products are used for diverse applications including household utensils,

automobile trims, conveyor belts, elevators, chemical and food processing

equipment, building and interior decoration and pharmaceutical equipment.


38

CHAPTER -4

DEPARTMENTS


39

ORGANISATION CHART

BRANCH SALES OFFICE/WARE HOUSE KOCHI

WAREHOUSE SRI.H.R NARASIHHAN

AGM/WHM

SR

----

MARKETING SRI.MILTU CHAUDHARI

AGM/BM

SRI.R.PREMNATH

(SR.TECH)

SRI.K.P.BILLU

(SR.T.PH.OPTR)

()

SRI.SUNIL MADHAVAN

SR,MGR(MRKTG)

FINANCE SRI.R.VENKATESWARAN

SR.MGR(F)

SMT.BEENA

MATHEW

(OS)

SRI.SARBENDER

(EDP.ASST)

SRI.SUNIL. M.

(JR.ASST)

SMT.SHEELA

ISSAC (SR.OS)

SRI.G.RAJESH

(SR.OS)


40

DEPARTMENTS

CENTRAL MARKETING ORGANISATION

The ISO 9001:2000 certified Central Marketing Organization (CMO) is India’s

largest industrial marketing set up that markets carbon steel produced by the four

integrated steel plants of SAIL.

Headquartered in Kolkata, it transacts business through its network of 34 branch

sales offices spread across the four regions, 24 Warehouses equipped with

mechanized handling systems, 11 Customer Contact Offices and 15 Consignment

Agents. CMO’s domestic marketing effort is supplemented by its ever widening

network of authorized and rural dealers who meets the demands of the smallest

customers in the remotest corners of the country. A strong IT support system

enables real time network connectivity within the entire CMO network.

Extensive customer contact, product and segment specialization, close

monitoring of order servicing and feedback analysis through the Customer

satisfaction Index are established norms at CMO. The customer friendly approach

of CMO is backed by practical after sales service.

Through the process of Key Account Management, CMO provides single window

service to key customers across the country for every business transaction from

enquiry to order booking, order tracking to delivery, and even consultancy after-

sales service.


41

Central Marketing Organization (CMO) is India's largest marketing home. It has

spread its wings far and wide from Srinagar in the North to Cochin in the South

and Dhimapur in East to Ahmedabad in the west.

All SAIL Product are marketed in India through C.M.O. to ensure quality and

prompt dispatch of product, CMO keeps in touch with producing units as well as

the transport and shipping sectors. It operates through the network of stockyards,

dockyards, Branch sales offices, consignment agents and Extension counter.

CMO has got responsibility to sell pig iron and mild steel products manufacture

by BSL, DSP, RSP, and BSL, having its headquarters at IspatBhavan, 40

Chouringee Road, Kolkata 71. CMO Branches spread throughout the country

with stockyards for storing and selling Iron & Steel materials of the plants.

Branch manager having other colleagues including finance executive to help

Branch Manager in day-to-day operations.

The network of branches is divided into Four regions as given below: -

Regions Branches Attached

Northern region, New Delhi Agra, Allahbad, Faridabad, Gaziabad,

Kanpur, Lucknow, Delhi, Chandigarh,

Jalandher, Jammu

Ludhiana and MandiGovindgarh.


42

Western Region,

Mumbai

Ahmedebad, Baroda, Pune, Mumbai,

Nagpur,Bokaro, Indore, Gwalior,

Jabalpur, Jaipur & Kota.

Eastern Region,

Kolkata

Bhubaneshwar, Bokaro, Kolkatta,

Durgapur Guwahati, Howarh, atna,

New Bongaigoan& Rourkela.

Southern Region,

Chennai

Bangalore, Chennai, Cochin,

Coimbatore, Hyderabad, Pondicherry,

Trichy& Vijayawada

In addition to above, one zonal office is functioning in Guwahati. CMO has got

transport and shipping department at Visakhapatnam to handle the export and

import consignment at the different ports.

FUNCTIONS OF BRANCHES:-

I) Booking of orders from the customers on long term and short-term basis.

II) Passing on details of booking to the concerned SRM Office.

III) Receipt of materials at stockyard by wagons/trucks.

IV) Issuance of offers and delivery orders to customers against their booking.

V) After sale services to customers.

With increasing competition and business scenario, it is their endeavor to increase

the market share and customer satisfactions have appointed KAMs- Key Account

Managers at the branch level and operations at branch level have been segmented

on the type of product-Flat or long. CMO is divided on Long and Flat basis as


43

both types of products have to be dealt in different manner due to nature of

application and varied uses.

Similarly, for better customer satisfaction, Customer Satisfaction Index (CSI) has

to be measured for the Key Account Customers. The Key Account Customer has

been identified on branch and national level and TMI and KAM of CMO are

following these customer's orders. AT plant level, PAC and PIC are appointed

who have full knowledge of products and process. The production and

coordination meeting is held in the last week of preceding month to decide the

final product mix.

FUNCTION OF MARKETING DEPARTMENT

1. To monitor the orders issued by CMO, So that these orders can fulfilled in

time.

2. Put pressure on CMO, to get orders for an underutilized mill.

3. To sell all the secondary products directly i.e. directly by BSL and by CMO.

4. On day to day basis it takes care of the dispatches i.e. daily dispatch are

checked.

MARKETING ACTIVITIES OF SAIL

ADVERTISEMENTS

Advertising is a paid form of communication where the payment is paid to media

which carries the message to the customers. It is the most commonly used tool by

the businesses on which company typically spends the greatest portion of its

promotional budgets. There are two distinct objectives of advertising, short term

and long term objectives.


44

SHORT TERM OBJECTIVES: To stimulate ‘traffic building’ within days of

the appearance of an advertisements usually by means of a promotional offer.

LONG TERM OBJECTIVES: To increase the number of customers from the

identified target market who have natural tendency to think of the identified

company as the right choice for the class of the business.

CENTRAL SALES DEPARTMENT

It is one and only branch sales office of SAIL in Kerala. The products of SAIL

are stored in modern warehouse of branch sales of Tripunithura. The sales of

products and other operations are undertaken by both in sales office and

warehouse.

Branch sales office of SAIL is given greater importance to customer service. They

provide better customer service by the implantation of Quality Management

System Branch sales office of SAIL can achieve something such as:

Can give reply to customer queries within three working days.

Customer waiting time with respect to issue of delivery order has been

reduced.

Improvement in working, preservation of document and housekeeping.

ABOUT THE WAREHOUSE

The state government of Kerala had acquired 14.93 acres of land at

Tripunithura and handed over to SAIL to develop a modern warehouse for its

branch sales office, cochin. Originally it was envisaged that warehouse would

have railway facility to material directly into it.


45

SAIL has invested around 7.49 crores towards the cost of land and

development charge .Out of 14.93 acres ,initially only 5.5 acres had developed

with stand for storing materials,roads,buildings etc. The entire land is secured

with boundary ,walloverlined with barbed wire fencing.

Some infrastructure facilities are available in warehouse. these are:

Warehouse office.

Substation for HT power supply.

60T electronic weigh bridge.

Covered go down of 720 sq.mts.

12.5MT capacity EOT cranes.

15MT capacity of mobile cranes.

ADVERTISING IN BRANCH SALES OFFICE OF SAIL,

COCHIN

Branch sales office of SAIL always tries to maintain good customer relationship.

So that SAIL given a greater importance for advertising. They give advertising

indirectly through dealers.

SAIL have one dealer in each district of Kerala. The dealers has been undertaken

the advertising activities of SAIL. The dealers makes advertisements for SAIL

and the branch sales office pay them for advertisements and SAIL also sponsors

for the events like basketball game.


46

POLICIES OF MARKETING

Marketing Planning has responsible function in the working of marketing

department. All the risky developments, taking out solution to cripple `situations,

this section carries out product pricing and related activities, some of the

programmes, policies and procedures are as follows:-

I) Positioning the product a value based place in customer mind.

II) Finalize annual sales plan and quantity, monthly, weekly, and daily rolling

programme of Rolling mills in consultation with CMO and mills. This plan

is based on the sales forecast receive from JPU SPL/ Iron and steel controller.

III) Optimizing the product-mix by proper utilization of available stocks.

IV) Receiving Enquiries and complaints, cancellation of orders etc.

V) Coordinating the works of mills and traffic department so as to maximize

dispatches.

VI) Co-ordinations with CMO from stages of enquiry, for exports, development

of new Profiles, sections, modification of product scheduling till the orders

are completed.

VII) Development of new qualities of steel.

VIII) Periodical market surveys of products to analyse the market position.

IX) Implementation of suggestions received from the customers’ feedback.

X) Ensure customer satisfaction by meeting customers regularly; provide

redress to their problems and fulfilment of demand.


47

PRICING POLICY AND SALES PROCEDURE:

PRICING:

Fixing the price of a product is the most vital function in the whole process of the

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-roll able items can be enumerated as

follows: -

(a) Prices offered in the auction sales.

(b) Quantity of material to be lifted.

(c) Managing director's approval.

The average of the prices offered by the bidder during auction is taken as the basis

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 the quantity purchased

lower will be the prices. This technique encourages the buyers to purchase larger

quantity. Finally the managing director approves the prices set by the pricing

committee. On this basis, a price list is prepared for all the potential buyers. Price


48

list also indicates the sales tax and Excise duty to be levied. Thus the interested

parties place their orders with the marketing department on the basis of price list

reviewed every month. Every customer is required to have a security deposit

amount of Rs.1 lakh. The payment for the material 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 the prices, 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.


49

While deciding the price following points are kept in mind:

Dispatch 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 approval the price

becomes applicable and the circular indicating the revised price is printed, issued

and distribution to the customers and all the concerned departments.

DISTRIBUTION

For the purpose of distribution of steel (as per JPC) policy in fashion, customers

are categorized into A, B, C & D. Priority sector customer e.g. Defence, Railways

etc. are under category A and about 60% of the 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. Customers are served on first come first served basis.

CHANNELS

Bokaro steel plant has zero level channels as it directly sells to the customers.

There is no intermediate among producer and consumer. Marketing Department


50

always remains in contact with the customers’ extracts information about the

current market situation on the basis of interaction between them.

SALES PROMOTION

Sales Promotion consists of a diverse collection of incentive tools designed to

stimulate quicker or greater purchase of particular product. As a part of

promotional activities, BSL is employing following activities:

a) Discount slabs is provided to boost the sales, description of which is given

below:

Up to 10,000 tones ----- No Discount

10,000 to 15,000 ----- 15% Discount

Above 15,000 ----- 20% Discount

b) To find new customers and to inform customers at far distant areas Tender

Notice given in the newspaper for sale of scraps. Best among the

application is accepted with a view to get the best revenue.

c) Sometimes when new item is to be sold sales notice is given in the

newspaper. But most of the time local customers get informed from other

customers.


51

MARKETING STRATEGIES

Steel being an industrial commodity it is very necessary to maintain customer

relationship for profitability and smooth running of company.

1. Customer Satisfaction

BSL adopts following practices for customer satisfaction.

a. Procedure / process adapted to access current / future expectation of customers.

b. It induces market research visiting customer premises attending to customer

complaints.

c. CMO has Market Management Group where specialists monitor changing

demand pattern and development in each Market segment is carried on.

d. It has posted market development officers at various locations that are its eyes

and ears for monitoring current and future expectation of its customer.

e. The Business-planning department is exclusively meant to study customer's

changing demand scenario and assess current and future expectation.

f. To understand customer needs seminars and workshops are also organized

by BSL.


52

BUILDING CUSTOMER RELATIONSHIP

BSL has adopted the philosophy of recognizing segment of the market and

identifying key customer in segment and giving them preferential treatment.

CMO sales executives have been trained to use direct selling as tool for building

long lasting relationship with the customers. Easy access to customers to seek

assistance makes proposals send comments and compliments.

MARKET DEVELOPMENT

BSL has valued customers group in identifying their specific needs Specific to

that group thus segmenting and developing market segment for our products.

Major product modifications are done as per their specific needs of the Market

segment thereby creating product differentiation packages.

PRODUCTION ACCORDING TO MARKET NEEDS

BSL is always in touch in market and try to produce according to market needs.

BSL tries to produce quality products / new products which fulfil the need of

market.

STOCK REDUCTION

Giving facilities like door delivery, road dispatches, credits facility and rounds

the clock stockyard operation.

PRICE FIXATION

Pricing is done basically by the CMO. Taking into consideration cost of

production, government steps on pricing, certain percentage of profit, price of

raw material fright charges etc. i.e. pricing is COST PLUS PRICING.


53

DESPATCH

As the product is manufactured, this department directs the stockyards the mode

of transport to the destination with reference to dispatch program and dispatch

advice is mode.

DOCUMENTATION

With the dispatch of product the Finance department calculates the total cost of

product as per demand order. Certain receipts and bills quoting the material code,

nature, quantity, and all expenses are sent to connected stockyard. The product

will be then released to the concerned person after proper and complete payment

to the pay-in- authorities is made.

CHANNELS OF DISTRIBUTION

“It refers to the set of interdependent organizations involved in the process of

marketing a product or a service available for use or consumption.”

FUNCTIONS OF DISTIBUTION CHANNEL

1. It solves geographical distance.

2. Helps to move from producers to customers.

3. Helps producers not only in the distribution of goods but also in

promoting the sales of products.

4. Assumes risk connected with carrying.

5. It communicates with consumers and producers.

6. It creates various utilities.

7. It ensures success of other marketing activities.

8. It helps to stabilize price by stocking adequate goods.

9. It forecast demand.


54

FUNCTION OF STOCKYARDS

i) Keeping records with regards to receipt of materials with description of

size, quality and quantity etc.

ii) Issuance of loading slip on receipt of delivery order from the branch.

iii) Loading of materials in the customer truck/trailer free of cost.

iv) Issuance of delivery challans-cum-invoice for the quantity delivered.

v) Handing over Test Certificate to customer along with challans.

vi)Submission of stock statement to the branch.

RAW MATERIAL DIVISION


55

RMD is planning to expand capacity in view of the enhanced production plans of

the steel plants and cope with the requirement of high quality iron ore. The Lime

stone quarries under RMD are located at Kuteshwar, Purnapani and

Bhawnathpur. Dolomite quarry is at Tulsidamar. RMD has centralized workshop

at Bolani for repair/overhauling of engines & transmission of heavy earthmoving

machinery operating at the mines.

Besides the above, RMD has three customer service office at Rourkela, Durgapur

and Bokaro for coordination with the steel plants. Two liaison offices are also

maintained at Bhubaneshwar and New Delhi for better coordination with

government agencies and other statutory authorities.

IRON ORE MINES

Mines State Annual capacity (MT)

Kiriburu Jharkhand 4.25

Meghahatuburu Jharkhand 4.30

Bolani Orissa 3.00

Barsua Orissa 2.01

Kalta Orissa 1.15


56

CENTRAL COAL SUPPLY ORGANISATION

Situated at Dhanbad in Jharkhand, the Central Coal Supply Organization (CCSO)

of SAIL’s Operations Directorate, is entrusted with the vital responsibility of

ensuring daily movement of around 12000 tons each of washed coking coal and

power –grade coal to all sail steel plants.


57

PROCESS FLOW CHART-BRANCH SALES OFFICE SAIL, KOCHI

YES

NO

ANNUAL DEMAND ASSESMENT

PLANT PRODUCTION

AVAILABILITY OF

STOCK

MONTHLY

DEMAND

FORECAST

SALES PLAN

ORDER STOCK

CUSTOMER ENQUIRY

CUSTOMER ENQUIRY CUSTOMER CONTACT

READY

STOCK

PLANNING

ISSUE OF OL/SO

BRQ

MP AT SRM

STTR

DESPATCH FROM

OTHER

WAREHOUSE

DD ORDER

MP AT SRM

DESPATCH

SETTLEMENT OF QUALITY

COMPLAINTS

ISSUE OF REFUND/CRDDIT NOTES

RECEIPT AT WAREHOUSE

DELIVERY OF MATERIAL

DESPATCH

DOCUMENT NEGOTIATION


58

PROCESS FLOW CHART FOR DELIVERY OPERATIONS: WAREHOUSE/SAIL/KOCHI

MATERIAL DELIVERY

ISSUE OF LOADING SLIP

VECHICLE INSPECTION & ENTRY

GROSSWEIGHT OF

VECHICLE

ISSUE OF

CHELLAN/INVOICE

LOADING IN

VECHICLE

TYRE WEIGHT OF

VECHICLE

MATERIAL

VERIFICATION

RELEASE OF

VECHICLE


59

CONCLUSION


60

CONCLUSION

The main objective of the study were to understand marketing activities and

distribution channel of branch sales office of SAIL, Cochin.

From the study it is clear that the advertising, competitors, customers, product

delivery and other processes in delivering the products of SAIL to the customers.

As conclude, let us hope that SAIL will become the leader of steel production in

near future and may they can their position to the India s largest steel producer.

Report of Intern Sail

Documents

Transcript of Report of Intern Sail