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

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

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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


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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


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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


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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
organizations 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 organizations 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.


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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.


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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 Indias 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 worlds eighth
largest steel producer, its3%-plus share of global steel output is still very low; it
is roughly the same as Ukraines share of world steel production. China, the
worlds biggest steelmaker, produces nearly ten times as much as India. In 2005
Indias 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 industrys
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


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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 Indias second
largest producer of iron ore and of having the countrys 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. CMOs 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 SAILs 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.


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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 SAILs
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. Its 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.

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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


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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 plants 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 Steels 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 manufacturerfrom 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 worlds 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 worlds 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 Indias 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 companys products conform to quality specifications of international
quality certification agencies, like ABS, API, TUV Rhine Land and Lloyds
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
SAILS 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 Indias
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. CMOs 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 MDs 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 SAILs 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.

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STEEL AUTHORITY OF INDIA LTD.

SCHOOL OF MANAGEMENT STUDIES, CUSAT

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