Summer Internship Project Report On

Marketing and Sales Strategy At

Steel Authority of India Limited (SAIL)

(A Government of India Enterprise)

Bokaro Steel Plant Prepared by: Deepa Singh. Roll no. 2010047. Batch: 2010-12. Industry Guide: Mr. Rajesh Kumar
15-10-2011

Faculty Guide: Dr. Shruti Jain

Page | 1

Summer Internship Project Report On Marketing and Sales Strategy

At Steel Authority of India Limited (SAIL)

Prepared by: Deepa Singh.

NIILM / IAE-Poitiers, FRANCE 2010-12 A report submitted in partial fulfillment of the requirements of the POST GRADUATE DIPLOMA IN BUSINESS MANAGEMENT (2010-2012) IAE, University Of Poitiers, Poitiers, France.

Submitted To:Company Guide:

Mr. Rajesh Kumar Assistant Manager (HR), Head Training & Development Steel Authority of India Ltd, Bokaro- Jharkhand

Faculty Guide :
Dr. Shruti Jain Faculty Sr. Lecturer International Business. NIILM CMS, New Delhi PGDBM 2010 2012.

Page | 2

INFORMATION SHEET.
1. COMPANY NAME STEEL AUTHORITY OF INDIA LTD.

ADDRESS

BOKARO STEEL PLANT. BOKARO STEEL CITY 827001. JHARKHAND + 91-6542-240339. 4th July, 2011 13th August, 2011 6 weeks Mr. Rajesh Kumar Assisstant Manager Head Training and Management
labsl@dte.vsnl.net.in, la.bsl@rmo.sprintrpg.ems.vsnl.net.in

PHONE NO. 2. INTERNSHIP DATE OF COMMENCEMENT DATE OF COMPLETION DURATION 3. INDUSTRY GUIDE NAME DESIGNATION PROFILE E-MAILS PHONE NUMBER

+ 91 - 6542-240 339

Page | 3

DECLARATION

I hereby declare that the project report titled MARKETING AND SALES STRATEGY OF SECONDARY AND BY-PRODUCTS AT BOKARO STEEL PLANT is my own work, to the best of my knowledge and belief. It contains no material previously published or written by another person, nor material, which, to a substantial extent, has been accepted for the award of any other degree or diploma of any other institute, except where due acknowledgement has been made in the text. The report represents independent and original work on the part of the candidate and no replicated work from any other Project work, article or book has been done.

DEEPA SINGH. ROLL NO. 2010047. NIILM-CMS, New Delhi.

Dated: 15/10/2011

Page | 4

CERTIFICATE FROM THE COMPANY GUIDE

This is to certify that DEEPA SINGH, a student of Post Graduate Diploma in Business Management from Northern Institute of Integrated Learning in Management Centre for Management Studies, New Delhi has done her Summer Internship at Bokaro Steel Plant in the Marketing Department from 04-07-2011 to 13-08-2011. The project work entitled MARKETING AND SALES STRATEGY OF SECONDARY AND BY-PRODUCTS AT BOKARO STEEL PLANT embodies the original work done by DEEPA SINGH during her Summer Project Training period.

Mr. Rajesh Kumar Assistant Manager (HR) Human Resource Department Bokaro Steel Plant, Bokaro Steel City, JHARKHAND.

Date: 15-10-2011.

Page | 5

CERTIFICATE FROM THE FACULTY GUIDE

This is to certify that the Summer Internship Project Report on "MARKETING AND SALES STRATEGY OF SECONDARY AND BY-PRODUCTS AT BOKARO STEEL PLANT has been done by "DEEPA SINGH" Roll No. "2010047" of PGDBM 2010-12 batch, under my guidance and supervision for the partial fulfillment of the Post Graduate Diploma in Business Management (2010-12) at the Northern Institute of Integrated Learning in Management Centre for Management Studies, New Delhi. To the best of my knowledge and belief, this report:
(a) (b)

Embodies the work of the candidate herself. Has duly been completed.

(c) Fulfils the requirements of the rules & regulations relating to the summer internship of the institute. Is upto the standards, both in respect of its contents and language, for being referred to the examiner?
(d)

Dr. Shruti Jain. Faculty International Business, NIILM-CMS, New Delhi

Dated: 15-10-2011.

ACKNOWLEDGEMENTS

Page | 6

An endeavor is not complete and successful till the people who make it possible are given due credit for making it possible. I take this opportunity to thank all those who have made the endeavor of mine successful for me and for all.

First and foremost I am very thankful to all the officers of Bokaro steel plant who really helped a lot and guided me throughout my training session, without their help I would have been unable to complete my project. These people really been kind enough in providing me all kind of available data and information.

I would like to thank to Mr. A.J. KACHHAP (DGM, STORE), K.K. SANYAL (AGM, BPP), Mr. N. KHASNOBIS (Sr. Manager, SSD), Mr. A.K. MISHRA (AGM, S & C), Mr. C. SRIKANTA (DGM, Marketing) and Mrs. MEENA KAMAL (Sr. Manager, Marketing) and I must pay special thanks to Mr. GOVIND BARMAN (Jr. Manager, Marketing). All are from Bokaro Steel Plant.

I extend my sincere thanks to Dr. Shruti Jain, my Faculty and SIP Mentor, NIILM-CMS, Greater Noida for having spared his valuable time with me and for all the guidance given in executing the project as per requirements. So, I am taking a great opportunity to thank those entire people who help throughout my project. I also express my thanks to the officers and staff of the training institute, Bokaro Steel Plant.

ABBREVIATIONS USED

Page | 7

SAIL BSL CMO MRD ITD

Steel Authority Of India Limited. Bokaro Steel Plant Limited. Central Marketing Organisation International Trade Division

INDEX

Page | 8

Chapters

CONTENTS
Title Page Cover Page Information Sheet Declaration Certificate from the Company Guide Certificate from the Faculty Guide Acknowledgement Abbreviations Used Index Preface Executive Summary

Page no.
1 2 3 4 5 6 7 8 9 10 11 12 12 13 13 14 15

1.

Introduction :
History Vision Core values of SAIL. Marketing Strategy of SAIL. Growth of Steel Industry in India. Objectives and Limitations of Study.

2.

Review Of Literature :
Rich Heritage Integrated Steel Plants. Major Units of SAIL. CMO Organizational Structure Of SAIL.

3.

Company Profile:
Joint Ventures Ownership and Management. SAILs Major Products. Present Scenario

Page | 9

PREFACE

In recent years the Indian Economy has been undergoing an important transition shift from ownership to professional management.

Page | 10

This project has been performed as a part of our Summer Training in second year PGDBM.I have undergone a summer project named The Marketing and Sales strategy of Secondary and Byproducts At Bokaro Steel Plant, for a period of six weeks. I did my summer training in the Marketing Department of BSL, where I found that all the professionals are very much committed to their work. This helped me a lot in getting a good deal of exposure. As I had to consult the DGM, AGM, Managers and Supervisors, I felt a bit of problem during the starting of project. But the conduct and cooperation of my superiors at work induced confidence in me to deal with problems whenever they came. After few days, I was confident enough to go in the customer survey and do the given work with proficiency and acumen. Since I had to complete my project within time frame, this made me experience the actual stress of the work-place. This I think will work a real booster when I will be working after the completion of the course. Working with colleagues was a great experience as I came to know that how person can work as a team in a multifarious industry to achieve the organizational goal. Indeed, I always tried to do justice with my duties .But this could be a success, as I got continuous support from my guide as well as other officers and colleagues. Despite all obstacles, hurdles I came across many difficulties to make this project. The purpose of this project is to understand the strategy of BSL to sell their secondary and byproducts. Later on, we will be able to understand how BSL has been effectively utilizing the scraps i.e. secondary products producing during the different production process. It comes during the production of prime products. The 1st Phase is the information about the company and its secondary products, i.e. what is secondary product, how it is produces and where it is used, and 2nd Phase consists of analysis of collocated data. So, at last I would like to thanks my institution for providing me with the opportunity to do summer training. I am also grateful to the BSL (SAIL) for providing me all the assistance in completing my project.

EXECUTIVE SUMMARY
The present study was undertaken to see the mode of sale of Secondary Product and By-product of SAIL. Marketing department is the newest genesis from the SAIL and attempts to reach their where no corporate has ever ventured so far.

Page | 11

The survey was conducted in Marketing Department and Sales Coordination department. I was to find how auctions, fixed price and tenders are used for marketing purpose BSL. Various steps involved are as follows. To know about the E-auctions of marketing departments. How they use this technique and 60% marketing and selling is done through auction and rest will be taken through fixed price selling and tenders. Data were mainly collected by marketing department of BSL. BSL is the largest Steel manufacturing sector of India and is top ranked in the global fortune 500 companies. During my training I had to find out mode of sale of secondary products of BSL. Primary products are sold by CMO, Delhi. I passed through various stages of problems and difficulties to accomplish the task of project work but it was a privilege for me to take this opportunity a challenging work to study and observe "marketing of Secondary products in B.S.L", which is a unit of SAIL. Bokaro Steel Plant recognizes that leadership is essential for survival in competition environment. Customer's satisfaction like quality is a journey and not a destination. It is essential that everyone in the company have a clear understanding of what customer satisfaction means if the plant aim to achieve leadership in customer satisfaction. While improved customer satisfaction is necessary for ensuring prosperity of the company must also be recognized that ability of the company to satisfy its customers would depend on its ability to continuously improve its profit and growth.

Chapter 1.

INTRODUCTION

Page | 12

HISTORY:
During struggle for independence, Pt. Jawaharlal Nehru, our first Prime Minister, had a very clear vision about the role of Steel in the development of our country. Although TATA Iron & Steel Company (TISCO) has been establishment in 1907 marking the beginning of Indian Steel Industry followed by Indian Steel Co. (1918), they were too small to meet the development requirements of a big country like ours. Therefore, in the 1st Industrial Policy Resolution of the Govt., soon after independence, Govt. decided to establish Steel Plants in Public Sector. However, work could be started at fast pace only in 1954, when Hindustan Steel Ltd., was formed and three Steel Plants of 1 MT capacity each, were established with provision of further expansion at Bokaro, Rourkela and Durgapur with assistance from USSR, West Germany and U.K. respectively. To improve the functioning of Steel Industry, Govt. decided to form a holding company during 1972, which was named as Steel Authority of India Ltd., (SAIL) and the same was incorporated on January 24, 1973, with an authorized capital of Rs. 2000 crores. SAIL was formed by registration of a company under the companies Act and not by the Act of Parliament. Govt., decided to abandon the holding company concept in 1978 and a bill was presented to the Lok Sabha. Accordingly, SAIL was again recognized in the following manner. VISION To be a respected worldclass corporation and the leader in Indian Steel business in quality, productivity, profitability and customer satisfaction.
Source: SAIL's Rajbhasha House Journal Ispat SAIL. Press Releases: 15 Sep 2010 New Delhi Source: www.scribd.com/doc/52922080/2/COMPANY-PROFILE Source: www.seminarprojects.com/attachment.php?aid=13167 Source: www.sail.co.in/aboutus.php?tag=company-vision.

CORE VALUES OF SAIL Customer Satisfaction Concern for People Consistent Profitability
Commitment of Excellence.

Page | 13

THE NEW MILLENIUM SAIL today is one of the largest industrial entities in India. Its strength has been the diversified range of quality steel products catering to the domestic as well as the Export markets and a large pool of technical and professional expertise.. UNITS: Central Marketing Organization (CMO), Kolkata. R&D centre for Iron and Steel, Ranchi. Centre for Engineering & Technology, Ranchi. Raw Material Division, Kolkata. SAIL Consultancy Division, Delhi. Enviornment Management Division, Kolkata. Central Coal Supply Organization, Dhanbad. Central Growth Work in Kulti, West Bengal. MARKETING STRATEGY OF SAIL: Qualitative improvements in service besides the products. Marketing channel optimization to take advantage of logistic. Demand for small lots and in remote area.

Source: dpe.nic.in/newsite/pms-Gur-ppt/leela-sail%20-%201.ppt. Source: Indian 2020-A vision for the new millennium by APJ Adbul Kalam and YS Rajan, 11 Jan, 2010. Source: The Hindu: Business: SAIL's multi-pronged strategy to become cost-competitive, 23 August, 2010.

THE SEVEN Cs OF SAIL:

Consistent Quality. Committed Delivery. Customized Product Mix. Contemporary Products. Competitive Price. Complaint Settlement.

Page | 14

 Culture of Customer Service.

GROWTH OF STEEL INDUSTRY IN INDIA:Formation of Hindustan Steel Ltd. Formation of SAIL Production Started at BSL Production Started at RSP Production Started at DSP Production Started at BSL Production Started at Salem Steel plant 19th Jan 1954 24th Jan 1973 4th Feb 1959 3rd Dec 1958 18th Dec 1959 29th Jan1964 March 1982

Source: www.slideshare.net/.../marketing-book-by-philip-kotler - United States.

Source: ww.renforcers.com/index.php?...15...products... Source: http://steel.nic.in/overview.htm

OBJECTIVE OF THE STUDY

Page | 15

In Bokaro Steel Plant, there is various section of Marketing Department. Since I have chosen Marketing of Secondary Products in BSL, my main objectives are: To know what is secondary product and why is it necessary to sell the secondary product. To know the use of secondary product. Market study of secondary products in BSL. To know the pricing strategy of secondary products. Ensuring timely dispatch of material, products, scraps etc to potential customers. To know the others terms and conditions for marketing of secondary products.

Limitation of Study

1. The study deals with only BSL point of view. 2.

As the major customer of BSL products are not an individual person. It was very

difficult to get formal feedback from them.

Chapter 2

REVIEW OF LITERATURE

Page | 16

RICH HERITAGE

SAIL traces its origin to the formative years of an emerging nation India. After independence the builders of modern India worked with a vision to lay the infrastructure for rapid industrialization of the country. The steel sector was to propel the economic growth. Hindustan Steel Private Limited was set up on January 19, 1954. The President of India held the shares of the company on behalf of the people of India. HOLDING COMPANY The Ministry of Steel and Mines drafted a policy statement to evolve a new model for managing industry. The policy statement was presented to the Parliament on December 2, 1972. On this basis the concept of creating a holding company to manage inputs and outputs under one umbrella was mooted. This led to the formation of Steel Authority of India Ltd. The company, incorporated on January 24, 1973 with an authorized capital of Rs. 2000 crore, was made responsible for managing five integrated steel plants at Bokaro, Bokaro, Durgapur, Rourkela and Burnpur, the Alloy Steel Plant and the Salem Steel Plant in 1978. SAIL TODAY SAIL today is one of the largest industrial entities in India. Its strength has been the diversified range of quality steel products catering to the domestic, as well as the export markets and a large pool of technical and professional expertise. The total turnover of the company was an all-time high of Rs. 39,188.66 crore during 2006-07, a growth of 21 per cent as compared to 2005-06.

Source: http://www.scribd.com/doc/51188836/1/Steel-Authority-of-India-Limited-SAIL.
Source: http://www.sail.co.in/aboutus.php?tag=company-background

INTEGRATED STEEL PLANTS

BOKARO STEEL PLANT

Page | 17

Indias largest flat steel producer in the public sector, Bokaro Steel Plant (BSL) was designed to produce flat products like Hot Rolled Coils/Plates/Sheets, Cold Rolled Coils/Sheets, Tin Mill Black Plates and Galvanised Plain/Corrugated Sheets (GP/GC). Bokaros world class hot rolled products enjoy excellent acceptance in the international market. It is also equipped with a state of- the-art Hot strip Mill that produce quality steels of international standards. A range of special steel products like DMR 249A, E- 460/500/550, IS-8500 Fe540B, SAILCOR, SAILPROP, SAILMED Si, SAILRIM, API grade steel, HRNO, SAILMA,WTCR,BSL-46 for auto sector etc.

BHILAI STEEL PLANT Five-time winner of the Prime Ministers Trophy for Best Integrated Steel Plant in the country. Bhilai Steel Plant (BSP) is a major producer of rails; heavy and wide (upto 3600 mm) steel plates as well as structurals. With an annual production capacity of 3.153 MT of saleable steel, the plant also specializes in other items such as wire rods and merchants products, including TMT bars and rods branded SAIL-TMT. Facilities for production of long rails have been installed at the plants Rail & Structurals Mill with capabilities enhanced to produce rails in rolled lengths of 80 meter and welded panels upto 260 meters. DURGAPUR STEEL PLANT Durgapur steel plant (DSP) with a saleable steel capacity of 1.586 million tonnes produces medium structurals, merchant products, skelp and continuously cast billets. Its extra high strength thermo mechanically treated Bars, branded sales TMT, have proven market acceptability, DSP is also a major producer of railway producer like forged wheels and axels.

Source: http://en.wikipedia.org/wiki/Steel_Authority_of_India_Limited.

ROURKELA STEEL PLANT Indias first integrated steel plant in the public sector, Rourkela Steel Plant (RSP) is a major producer of diversified range of sophisticated steel products, including plate mill plate, HR Plate/Coils, CR Sheets/Coils, Galvanized Plain/Corrugated Sheets/Coils, Pipes & Spiral Weld Pipes, Electrolytic Tinplates and Silicon Steel Sheet.

Page | 18

MAJOR UNITS OF SAIL

STEEL PLANTS 1. 2. 3. 4. Bokaro Steel Plant (BSL) in Jharkhand Durgapur Steel Plant (DSP) in West Bengal Rourkela Steel Plant (RSP) in Orissa Bhilai Steel Plant (BSP) in Chhattisgarh

RAW MATERIAL DIVISION The Raw Material Division (RMD) was formed in 1989 with headquarters in Kolkata for management of all the captive mines of the SAIL steel plant in the eastern sector.

Iron Ore Mines Mines State Annual Capacity (MT)

Kiriburu Meghatuburu Bolani

Jharkhand Jharkhand Orissa

4.25 4.30 3.00

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.

CENTRAL MARKETING ORGANISATION

Page | 19

The ISO 9001:2000 certified Central Marketing Organisation (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. CMOs International Trade Division (ITD) in New Delhi exports iron & steel products of SAILs four main integrated steel plants and maintain close liaison with buyers abroad. ITD has successfully established SAILs reputation as a producer of quality steel products and a consistent supplier across the five continents. Among the notable destinations are China , Korea, USA, Canada, Philippines, Indonesia, Malaysia, Saudi Arabia, Iran UAE, Europe(UK, Italy, Spain, Germany), Taiwan, Japan, Thailand and Singapore, as well as neighbouring countries like Sri Lanka, Myanmar, Nepal and Bangladesh, The range of services on offer includes:
Design and Engineering Services: Feasibility Studies; Project proposal for Financial

Institutions; Detailed Project Reports; Basic/Detailed Engineering; Tender Specification Preparation; Bid Evaluation. Project Management Services: Project Planning, Monitoring & Supervision; Procurement & Inspection; Plant Erection & Supervision; Start up, Testing & commissioning; Post Commissioning Stabilization. Technical Services: Plant Operation & Maintenance; Technology Up gradation; Quality, Productivity & Performance Improvement; Environment Management & Pollution Control; Energy Conservation & Audit; Mine Planning & Development. HR/Training Services: Training needs Assessment; Setting up Training Systems/Facilities; Training for operations, Maintenance & Management of Steel/Power Plants; Engineering & Technical Skills Training; Management Development Programmes; Training for Trainers; Recruitment Services; Appraisal & Reward Systems; Preparation of Personnel & Training Manuals. Management Services: TQM & ISO9001:2000 Certification Assistance; Corporate Planning; Benchmarking; Corporate Restructuring; Marketing & Distribution; Software Development & System Design. RESEARCH & DEVELOPMENT CENTRE FOR IRON & STEEL: SAILs corporate R&D unit is located at Ranchi. The ISO9001:2000 certified Research & Development Centre for Iron & Steel (RDCIS) undertakes R&D projects in diverse realms of iron & steel technology under the categories of Basic scientific Research, Plant Performance

Page | 20

Improvement, Investigation & Consultancy Assignments, Equipment & Instruction Design and Major Technology Development.

Source: http://www.sail.co.in/sales.php?tag=sales_centres Source: http://www.sail-steel.com/customer/MKTFeedbackLogin.html.

ORGANISATION STRUCTURE OF SAIL

CHAIRMAN

DIRECTOR (TECH)

MANAGING DIRECTOR, BSL

MANAGING DIRECTOR, BSL

Page | 21
MANAGING EXE. DIRECTOR, SSP EXE. DIRECTOR, MANAGING DIRECTOR DIRECTOR, RSP ASP VISL DIRECTOR, DSP

DIRECTOR PERSONAL

DIRECTOR FINANCE

CHIEF VIGILANCE OFFICER EXE. DIRRCTOR (OPERATION EXE. DIR. (IA)

ED (TECH & LEGAL SERVICES) EXE. DIR. (PROJECTS)

EXE. DIR (CMMG) EXE. DIR. (CIG) EXE. BOKARO STEEL PLANT - A PARTNER IN NATION BUILDING DIRECTOR

Page | 22

Bokaro Steel Plant - the fourth integrated plant in the Public Sector - started taking shape in 1965 in collaboration with the Soviet Union. It was originally incorporated as a limited company on 29th January 1964, and was later merged with SAIL, first as a subsidiary and then as a unit, through the Public Sector Iron & Steel Companies (Restructuring & Miscellaneous Provisions) Act 1978. The construction work started on 6th April 1968. The Plant is hailed as the countrys first Swadeshi steel plant, built with maximum indigenous content in terms of equipment, material and know-how. Its first Blast Furnace started on 2nd October 1972 and the first phase of 1.7 MT ingots steel was completed on 26th February 1978 with the commissioning of the third Blast Furnace. All units of 4 MT stage have already been commissioned and the 90s' modernisation has further upgraded this to 4.5 MT of liquid steel. Bokaro Steel Plant was originally incorporated as a limited company on 29th January 1964. With the formation of the Steel Authority of India Limited (SAIL) on 24 January 1973, it became a wholly owned subsidiary of SAIL and on 1st May 1978 it was eventually merged with SAIL through the Public Sector Iron & Steel Companies (Restructuring & Miscellaneous Provisions) Act 1978.

Page | 23

The Plant is hailed as the countrys first Swadeshi steel plant, built with maximum indigenous content in terms of equipment, material and know-how. Its first phase of 1.7 MT ingots steel commenced on 2nd October 1972 with the commissioning of the first Blast Furnace and completed on 26th February 1978 with the commissioning of the third Blast Furnace. All units of 4 MT stage have already been commissioned. The Plant is designed to produce flat products like Hot Rolled Coils, Hot Rolled Plates, Hot Rolled Sheets, Cold Rolled Coils, Cold Rolled Sheets, Tin Mill Black Plates (TMBP) and Galvanised Plain and Corrugated (GP/GC) Sheets. Bokaro has provided a strong raw material base for a variety of modern engineering industries including automobile, pipe and tube, LPG cylinder, barrel and drum producing industries The Township Bokaro Steel City is located in idyllic surroundings on the southern bank of river Damodar with Garga, one of its tributaries, meandering along the southern and eastern outskirts of the city. On the north, the city is flanked by the high ranges of the Parasnath Hills and on the south; just beyond the river Garga, it is enveloped by the Satanpur Hillocks. The vast rolling topography of the city is interspersed by graded valleys and winding rivulets typical of the Chhotanagpur Plateau. Within two decades of Bokaro Steel coming into existence, the city has blossomed into a regional urban centre of over 8 lakh people from different parts of the country, making the city a Mini Bharat.

Achievements and Peripheral Development Bokaro Steel is striving to reach the glow and warmth of its furnaces to people living at the periphery of this thriving steel city. All villages and residential settlements within a radius of 20 kilometres are covered under the peripheral development programmes that benefit some 3 lakh persons.

Source: http://www.sail.co.in/information_act.php? tag=informationact_manual_bokaro1 Source: http://www.sail.co.in/pnu.php?tag=bokaro_community Source: STEEL SCENARIO JOURNAL (Bokaro Darpan, weekly, Jan-May08)

Page | 24

BOKARO STEEL PLANT Raw Materials & Material Handling Plant The Raw Materials and Material Handling Plant receives blends, stores and supplies different raw materials to Blast Furnace, Sinter Plant and Refractory Materials Plant as per their requirements. It also maintains a buffer stock to take care of any supply interruptions. Some 9 MT of different raw materials viz. Iron ore fines and lumps, Limestone (BFand SMS grade), Dolomite lumps and chips, hard Coal and Manganese ore are handled here every year. Coke Ovens & By-product Plant The Coke Oven Complex at Bokaro converts prime coking coal from Jharia, Dugda and Moonidih and medium coking coal form Kargali, Kathara and Mahuda, blended with imported coal, into high quality coke for the Blast Furnaces, recovering valuable byproducts like Anthracene Oil, Benzene, Toluene, Xylene, Light Solvent Naphtha, Ammonium Sulphate and Extra-hard Pitch in the process. Bokaro is situated in the prime coal belt of the country. Blast Furnaces Bokaro has five 2000-cubic metre Blast Furnaces that produce molten iron - Hot Metal for steel making. Bell-less Top Charging, modernised double Cast Houses, Coal Dust Injection and Cast House Slag Granulation technologies have been deployed in the furnaces. The Slabbing Mill Slabbing Mill transforms ingots into slabs by rolling them in its 1250 mm Universal FourHigh Mill. The rolling capacity of the Mill is 4 MT per annum.

Source: http://www.sail.co.in/aboutus.php?tag=company-policies Source: www.sail.co.in/pnu.php?tag=bokaro_community

Chapter - 3.

Page | 25

ROLE OF MARKETING DEPARTMENT

INTRODUCTION OF MARKETING DEPARTMENT: Marketing Department of Bokaro Steel Plant is known as Marketing and Strategic Planning Department It deals with the activities of marketing of Prime products, Secondary products, etc. The marketing is done in two ways. (a) Marketing of prime products where sates activity are co-ordinated by central marketing organization. (b) Marketing of secondary products and coal chemicals are done directly by sale of product by B.S.L. Marketing of these products are conducted by various sections by marketing department of Bokaro Steel plants. It is engaged, with marketing of all products for home sale or export. The 2.5 Million tones section is mainly related with prime products. This section includes Merchant Mill (MM), Wire Rod Mill (WRM). Rail and Structural Mill (RSM) and Billet and Blooming Mill (BBM) The related Products are. MM - Angle, channel, beams, rounds and TOR WRM - Wire rods, U - structured., RSM BBM Rail and Heavy structural Billet and Blooms

The 4.0 Million tones section also known as plate mill section dealing with plates. Now this section has got ISO - 9002 certificate. The secondary section deals with the secondary Products, it includes scraps of iron and steel slag, coal and coke fractions, coal chemicals. The marketing development section deals with the MIS and strategic planning activity come under this section. In addition to the above outstation market development groups are functioning at Kolkata, Mumbai and New Delhi. The Export section deals with the activities of the exports in respect of Iron and Steel items produced by Bokaro steel plant.

Page | 26

MARKETING DEPARTMENT OF BSL IS BEING DIVIDED UNDER VARIOUS SECTIONS AS 1. 2. 3. 4. 5. 6. 7. Market Development and strategic planning Secondary Product Coal Chemicals. Merchant Mill / Wire Rod Mill Rail and Structural Mill. Billet and Bloom Mill. Plate mill.

FUNCTION OF MARKETING DEPARTMENT 1. To monitor the orders issued by CMO, So that these orders can fulfilled in time. 2. 3. 4. Put pressure on CMO, to get orders for an underutilized mill. To sell all the secondary products directly i.e. directly by BSL and by CMO. On day to day basis it takes care of the dispatches i.e. daily dispatch are checked.

POLICIES OF MARKETING AND STRATEGIC PLANNING M & SP has responsible function in the working of marketing department. All the risky developments, taking out solution to crippled situations, this section carries out product pricing and related activities, some of the programmes, policies and procedures are as follows :Positioning the product a value based place in customer mind. Finalize annual sales plan and quantity, monthly, weekly, and daily 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. Optimizing the product-mix by proper utilization of available stocks. Receiving Enquiries and complaints, cancellation of orders etc. Coordinating the works of mills and traffic department so as to maximize dispatches. Co-ordinations with CMO from stages of enquiry, for exports, development of new Profiles, sections, modification of product scheduling till the orders are completed. Development of new qualities of steel. Periodical market surveys of products to analyze the market position. Implementation of suggestions received from the customers feed

Page | 27

bock. Ensure customer satisfaction by meeting customers regularly, provide redressal to their problems and fulfillment of demand.

MARKETING STRATEGIES OF BSL Steel being an industrial commodity it is very necessary to maintain customer relationship for profitability and smooth running of company. 1 BSL adopts following practices for customer satisfaction. a. Procedure / process adopted to access current / future expectation of customers. 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. 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.

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.

Page | 28

JIT DELIVERY JIT Delivery means just in time delivery. BSL is able to make delivery just in time because it works in pre-planned manner; it takes order only after consulting the production units. So that the products can be delivered in right time. 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 full fill the need of market. 1. STOCK REDUCTION Giving facilities like door delivery, road dispatches, credits facility and rounds the clock stockyard operation. 2. 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 . 3. DESPATICH 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. 4. 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 condensed person after proper and complete payment to the pay-inauthorities is made. ORGANISTATION CHART OF MARKETING DEPARTMENT (BSL)

Page | 29

Chapter - 4.

Page | 30

MARKETING NETWORK

CENTRAL MARKETING ORGANIZATION 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 Ahmadabad 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 Ispat Bhavan 40 Chouringee Road, Kolkata 71. CMO has got 40 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 B.M. in day-to-day operations. The network of branches is divided into Four regions as given below: -

Page | 31

Regions Northern region, New Delhi

Branches Attached Agra, Allahabad, Faridabad, Ghaziabad, Kanpur, Luck now, Delhi, Chandigarh, Jalandhar, Jammu Ludhiana and Mandi Govindgarh. Ahmadabad, Baroda, Pune, Mumbai, Nagpur, Bokaro, Indore, Gwalior, Jabalpur, Jaipur & Kota. Bhubaneshwar, Bokaro, Kolkata, Durgapur Guwahati, Howarh, Patna, New Bongaigoan & Rourkela. Region, Bangalore, Chennai, Cochin, Coimbatore, Hyderabad, Pondicherry, Trichy & Vijayawada

Western Region, Mumbai Eastern Region, Kolkata Southern Chennai

In addition to above, one zones 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 Booking of orders from the customers on long term and short-term basis. Passing on details of booking to the concerned SRM Office. I) Receipt of materials at stockyard by wagons/trucks II) Issuance of offers and delivery orders to customers against their booking. After sale services to customers. With increasing competition and business scenario, it is their endeavour 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 both types of products have to be dealt in different manner due to nature of application and varied uses. FUNCTION OF STOCKARDS

Page | 32

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 T.C. to customer along with challans. vi) Submission of stock statement to the branch.

INTERNATIONAL TRADE DIVISION (ITD) SAIL'S ITD looks after exports and imports, maintains close liaison with buyers which helps establish SAIL'S reputation as the maker of finest steel products in so many countries around the globe. Notable among them are Australia, Japan, South Korea, China, Egypt, Iran, Iraq, UK, USA and Russia. Continuous co-ordination with the production units is of up most importance for a key executive.

Chapter 5. SECONDARY PRODUCT

Page | 33

SECONDARY SECTION- AN INTRODUCTION Secondary section started functioning after the commencing of Bokaro steel plant. The secondary products section of the marketing department is solely responsible for the selling of secondary products and by products of B.S.L All the defectives/ rejected items; this department except the rejected/ defective plates sells scrap. The defective plates are sold by CMO (Central Marketing organization) since December 2001. The secondary products are sold by auction sale, Tender and fixed price sale. LIMITATIONS OF STUDY The study deals with only B.S.L. point of view. As the major customers of B.S.L products are not an individual person. It was very difficult to get formal feedback from them. TYPES OF PRODUCTS In Bokaro Steel Plant, the finished products are categorized into three parts: 1 Prime Products: - These are the actual products, which are originally produced for example, blooms, billets, channels, rounds, angles etc. 2 By Products: - These products are not originally produced by Bokaro Steel Plant, but are outcomes while producing the prime products. 3 Secondary Products: - These are the defectives or rejected materials due to improper mixing of chemical components or fail to meet the optimum requirements. Scraps generated inside plant are also termed as Secondary products. The secondary products used here in after will mean ferrous materials generated from various production units which can either suitably be used for re-melting to produce iron and products or offered for sale if rendered surplus in production process for example Defective Heavy blooms, Defective Rails, Rail cutting, Rod cutting, Scrap etc.

WHAT ARE SECONDARY PRODUCTS? In the case of manufacturing process, in every stage of production, always there will be certain percentage of products, which do not confirm to the standard quality, size and specifications. Such products are termed as "Secondary Products". Moreover, while

Page | 34

shaping the prime products, both ends and sides are cut. These cutting are also categorized as "Secondary Products" in Bokaro Steel plant, as they are re-rollables. Following Items fall under the category of Secondary Products.: (A) REROLLABLE/IRON AND STEEL SCRAP/BFG SLAG 1. 2. 3. 4. 5. 6. 7. 8. 9. MS SLAB END CUTTING WITHOUT FISH TAIL MS THICLE PLATE CUTTING (25-40 MM) MIXED W.FR. SPILLED HOT METAL (10 MT AND BELOW) SMS ARISINGS. LIQUID NITROGEN. FINE IRON CHIPS FROM IMP (FE-70% APP). FERROUS SIELPHATE LOOSE. BE GRNAULATED SLAJ (BOTH BY FIXED PRICE AND TENDER). LIQUID ARGON. PIG TRON.

(B) OTHERS 1. CARBIDE SLUDGE. 2. U/R AMC/MCB BRICKS. 3. U/R MAJ CHROME MAJ BRICKS. (C) COAL CHEMICALS AND BY PRODUCT 1. 2. 3. 4. 5. 6. 7. 8. 9. MG BENZENE NG TOLUENE LS MAPTHA SB OIL HP NAPHTHALENE ANTHRANCENE OIL EXTRA HARD PITCH HARD MEDIUM PITCH SOLID STATE HARD MEDIUM PITCH LIQUID STATE

(D) REROLLABLE AND IRON & STEEL SCRAP AND BFG SLAG

Page | 35

1. MS INJET (RE/RMON ROLLLABLE AT BSC)ASP 2. SIDE TRIMMING (STEEL SCRAP) 3. SMS SPLASHING ASP ONLY 4. LD SLAJ FOR IISCOMS THICK PLATE CUTTING (25.40 MM) MIXED W.FT FOR ASP 5. U/S SL MILL ROLL # (PER ROLL) IISC/CENT GOVERNMENT /PSU/SISTER CON
(E) OTHERS

1. 2. 3. 4. 5. 6. 7.

USED REJECTED WODDEN PALLETS FOR BRL USED REJECTED SIDE GATE PLATE FOR BRL USED REJECTED HA-BRO 62 BRICKS FOR BRL USED REJECTED ALUMINUO SILICATI BRICKS FOR BRL USED REJECTED MAJNESIA CARBON BRICKS FOR BRL BREEZE COKE ASH FOR BRL SLAG POL FOR DSP

NECESSITY OF SELLING THE ''SECONDARY PRODUCTS" The net sales realization from all the Secondary products, by products and co-products of BSL is around Rs. 700 crores which is quite more than money the big industries. Out of this Steel Scarp arising itself brings about Rs. 18200 cores of money every year. Reproduction of main products from the; secondary products requires re-melting it again for the required composition of the materials as per the desired specification. By selling it to the different Mills/traders/Processors the plant earn around Rs.5000 per tones of the direct profit than by re-producing it to the main product. The traders /processors/re-rollers, use these as a raw materials for different finished products making huge profits, the plant is also not losing anything. Profit is the main aim of every business, and when the realization of these products for the finished products proves to be costlier, the management plant decided to sell it to the local market. By selling secondary Products to the Local market new industries are developed for rerolling the Secondary materials to make finished products. It has also increased the small-scale industries and employment opportunities. MARKETING OF SECONDARY PRODUCTS

Page | 36

During the seventies and sixties when the plant was one million-tonnes and 3.5 milliontonnes capacity respectively, arising of secondary products were limited and such arising were recycled for re-melting. Therefore there was no scope for marketing in other words it was not economical. The plant capacity has been increased from 3.5 million tons to 5 million tonnes in the late sixties. New technology has been adopted while increasing the capacity of-the plant where by the use of arising for re-melting drastically reduced. This has given more impact to the making of secondary product. In the nineties we have seen lot of changes in the economic scenario of the country. The concept of more employment in Public Sector Enterprises has changed to more profits. There by the plant also has geared up its strategy towards this end. One of the strategies adopted by the plant for increasing the profit is marketing of secondary products. In the recent years a number of foundries and re-rolling Mills come into existence throughout the country. These small scales Sector need the "Secondary products" as input raw material for their production. The company has engaged in educating them the use of secondary products for different kinds of end products for consumption of general public. The plant extends all types of facilities and assistance to these smallscale units. Which, in turn gives scope for more employment opportunities. The plant for marketing has adopted following strategy: 1. 2. 3. Committed delivery. Competitive price Quick complaint settlement.

Culture of customer service.

It may be mentioned here that the companies' profit consists of 10% turnover of secondary products for the Last two years.

Chapter 6. PROCEDURE OF SECONDARY PRODUCTS

Page | 37

DETAILS OF SCRAP There are various types of scrap, which is generated from the particular prime products. Some brief summaries are given here: 1. PCM SCRAP This is a scrap generated in the pig-casting machine and consists of splashing, PCM runners and fires is in the wsix range of up to 1.0 tonnes per piece. 2. BF RUNNER SCRAP Generated in the blast furnace cast houses in the form of runner jams etc the maximum wsix per piece is up to 2 tonnes. This scrap contain amount of slag. 3. UNPROCESSED STEEL Generated in the steel melting shops in slag cups and metal ladles. As the skulls are quite broad in dimensions, some of them are required to be cut into sizes suitable for loading into trucks. These skulls are sold in the wsix ranges up to 2 tonnes per piece. 4. SBIM SCRAP This consists of semi broken in got mould and bottom part as scrap and is in wsix range up to 2 tonnes per piece. 5. COBBLED SCRAP The cobbled scrap arises from wire rod mill and includes some rejected coils and binding wires also. 6. REJECTED ROLLS. Cast iron rolls rejected steels rolls. 7. MILL CUTTINGS. Rail and structural mill cuttings, merchant mill cuttings, rail cuttings, plate end sharing rejected slabs, Slabs cuttings, miss rolled slabs, and wire rod cuttings are included in this type of scrap.

COLLECTION OF SCRAP 1. All scraps identify the metallic scrap generated in the production, process and lying in the shop. The shops collected the scrap with the help of overhead cranes and stock them for loading into wagons.

Page | 38

2. Rejected rails and sleepers lying near the railways track inside the plant are collected at such points from where loading and collection by truck is possible. 3. Crane facility is provided for loading the scrap into the truck whenever cutting or processing not possible on the spot. 4. Marketing recovery department is responsible for overall coordination of scrap collection from the entire plant. For this each shop nominate one executive for ensuring the clearance of scrap from the shop. 5. Head of Marketing and customer service department requires the progress on scrap collection on weekly basis. 6. Marketing recovery department makes suitable schedule for collection of scraps and intimates the date of collection to respective shops.

PROCESSING OF SCRAP 1. All the scrap, which is collected, is not sold some of the scrap portion is used for the re-melting purpose, MRD identifies such scrap. It arranges collection, handling and processing of all such scrap at various stockyards before sending in required quantity to the steel melting shop, converter shop and foundry. 2.After such processing, MRD arranges supply of required scrap to respective. Consuming shops. PLANNING FOR SALE OF SECONDARY PRODUCT 1. Marketing Recovery Department (MRD) works out the quantum of different types of scrap available for sale on monthly basis. This is determined by ascertaining the total scrap stock at the beginning of the month. Scrap arising during consumption. The remaining quantity is considered for sale. A, monthly report on availability of scrap is prepared by MRD and sent to marketing department. 2. Marketing Department finalize the plan for actual quantity of scrap to be sold in consultation with MRD. Marketing department finalizes mode of sale, terms and conditions for sale, locations and commercial aspects. 3. The pricing committee as approved by managing director fixes the price of each type of scrap. 4. Marketing department obtains MD's approval on price fixed by pricing committee.

Page | 39

DEMAND REGISTRATION OF BSL Marketing department of BSL sales homogeneous steel scrap at fixed price. For this purpose the procedure for registration of demand and offers is as below: 1. Preference for sale of material given to local parties and those, which are actual customer. Material is not sold for trade. 2. Sale of material made to re-rolling mills and scrap processing units and the lots of sale between them maintained at 67:33. 3. Based on the above consideration "offer letter" issued to the party offering a quantity, which has been lifted by them during the last preceding year or allocated by the state industries, Department. .

PROCESS OF RE-ROLLING 1. NAME OF THE MACHINERIES:

The steel re-rolling mill requires the following machinery to products rolling materials form the mild steel scrap. a. b. Main motor connected with pulley and V-Belts. Fly-wheel as per the requirement and size of the mill

c. Pinion Gear Box consisting of three gears. Five stands which are situated in the shed for rolling of hot scrap up to the finished products. e. Furnace the size of the furnace varies from 30ft to 40ft in length, 6ft width and 8ft in height with a coal fired chambers or oil-fired chamber.

2.

MAN POWER REQUIREMENT

a. in each re-rolling mill a foreman is very necessary to maintain the machines and to produce a good quality product. To assist him there should be one section man and one fitter.

Page | 40

b. Furnace requires one worker for pushing the material inside the furnace two workers for pulling out the material and two for shifting the materials from furnace to the rolls. c. From stand 1 to stand 5 nine workers are required for pushing the hot metal in the rollers. They work for only four-hour out of six hours. So about sixteen workers are needed to work on one shift.

PROCESS OF MANUFACTURING The scrap for the re-rolling is generally received from BSL railways. These materials are not directly re-rollables so first it is required to make a re-rollable and of proper size as per the requirement of the finished products. In the recent years a number of foundries and re- rolling mills came into existence throughout the country. These small scale sectors need the "Secondary Products" as input raw material for their production. The company has engaged in educating them the use of Secondary Products for different kinds of end products for consumption of general public. This material is then continuously passed from one stand to the other unit the finished product comes out. The rolls are provided with the grooves as per the requirement of the finished products.

PRODUCTS OF THE RE-ROLLING MILLS Over the years a number of re-rolling mills/steel processing mills and trading companies have come up in an around Bokaro. The plant is meeting the raw material need of these mills and the availability of the re-rollables has increased the re-rolling mills to develop very fast. The plant extends ail types of facilities and assistance to these small-scale units, which in turn give scope for more employment opportunity. 1. M.S. Sections, 2. 3. 4. 5. 6. Squares, Angles, Channels, Flats, Rounds, Z-Sections, Li- Sections, T-

Cold Twisted Deformed (C.I.D) Bars. TOR Steels, Beams. Strips. Hooks.

Page | 41

PROCEDURE APPLIED FOR SALE OF SECONDARY PRODUCTS 1. After obtaining approval of quantity and price for sale, Marketing department scrutinizes the demand from various parties, examine the Priorities and issue "offer letters" to respective parties. The terms and conditions for sale are also enclosed with the "offers Letter" 2. About one third of the quantity of material to be sold during the year is offered to the actual users, subject to registration of demand. 3. For the balance quantity to be sold at prices fixed by pricing committee, preference is given to actual users over traders. If there are no actual users, the material may be offered to traders giving preference to registered traders over others. 4. First preference is given to the actual users for allotment of scrap against particular category of users. Scrap processing units are given second preference for such allotments. 5. The amount received from the party towards advance payment and security deposit is forwarded to finance department by marketing department after recording the details in the register. 6. Parties are allowed to visit the respective location disposals site, and inspect the scrap offered for sale. 7. Marketing department prepares sale order for the parties who have accepted the offer. Sale orders are issued party wise and category wise i.e. individual sale order covers such categories like C I scrap, steel scrap, re- rollable, sluges and waste products.

Chapter 7. SALES AND DISTRIBUTION

SELLING OF SECONDARY PRODUCT

Page | 42

This involves a direct marketing process. The management of BSL in consultation with the official of the market development and customer service department work as group for the sale of these items. There are two methods of selling these re- rollables defective materials: By Auction Sale. By Marketing Department (Fixed Price).

AUCTION SALE In this method the defective materials from all the mills is arranged in heaps of 100-150 tones to be sold by auction. Generally auction sale takes place ones in a month. Representative from all the re-rolling mills turn up during auction and they bid for the available material. The raw material need of this mill is being made by the plant and the availability of the re- rollables have increased the re-rolling mill to develop very fast. FIXED PRICE SALE The re- rollable material is also sold through marketing department. The percentage of material to be sold by auction or by marketing depends upon the management decisions. There are different re- rollables coming from 4 different mills that can be sold. The pricing committee depending upon carries out the pricing of these materials: 1. 2. 3. The price offered by the customers during auction sale. The quantity to be sold. The approval of the managing director.

The customer approaches the department makes the payment in advance and lifts the material as and when it is made available to them. Sale of material is done on first come first serve basis.

PRICING POLICY OF SECONDARY PRODUCT The policy adopted by the marketing department for pricing of materials is largely guided by the price offered by the bidders during the auction. The various factors taken into consideration while pricing the re-rollable items can be enumerated as follows: (a) (b) Prices offered in the auction sales. Quantity of material to be lifted.

Page | 43

(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. TENDER DOCUMENT TERMS & CONDITIONS 1) The parties desirous of purchasing the material have to quote for entire quantity of the material. 2) The tenderers are advised to inspect the material at B.F. Slag Dump, if so desired, before submitting the quotations. 3) Terms of sale: On As is where is basis ", " No complaint basis and Ex-works basis" No PICK and CHOOSE shall be allowed other than sorting out Iron/Steel pieces found, if any. 4) The conditional quotations are liable to be rejected. 5) EARNEST MONTEY: EMD (Earnest Money Deposit) Rs 100000/- for the item to be deposited in the form of DD/BC/PAY ORDER in favour of SAIL/ Bokaro Steel Plant payable at Bokaro from any Nationalised / Scheduled banks along with the quotations. Any variation / demand in such taxes, duties, levies, and charges and / or any fresh imposition of such taxes, duties, levies and charges shall also be to the account of the bidder to whom the tender is awarded. The tenders should quote their rate in per cubic meter against the total quantity as asked for in the tender document both in words and figures. In case of any mismatch / ambiguity between the two the higher of the two rates only shall be considered. The tender should be submitted in the TENDER BOX placed inside the CONFERENCE HALL OF MARKETING AND STRATEGIC PLANNING DEPARTMENT on the 5th floor of ISPAT BHAWAN.

6). PAYMENT TERMS: The successful bidder has to make payment for the quoted quantity in 12 (twelve) equal instalments of 1000 Cu.m each. 1st instalment is to be deposited within 10 (Ten) days from date of issue of sale order inclusive of the date of issue of sale order. Subsequent instalments are to be deposited within 30 (Thirty), 50 (Fifty), 70 (Seventy), 90 (Ninety), 110 (One hundred ten), 130 (One hundred thirty), 150 (One hundred fifty), 170 (One

Page | 44

Hundred seventy), 190 (One hundred Ninety), 210 (Two Hundred ten) & 230 (Two Hundred Thirty) days from the date of issue of sale order (inclusive of the date of issue of sale order). However, lifting of entire quantity of material has to be completed within the validity period of 300 (Three Hundred) days from the date of issue of sale order (inclusive of the date of issue of sale order). 7) LOADING AND TRANSPORTATION: Loading and transportation of the material in the tenderer vehicle has also to be done by the tenderer at their own cost and arrangements. Successful customer will be allowed to lift the material only 4 days in a week. 8) Bokaro Steel Plant reserves the right to accept or reject any of the tenders or all the tenders or award contract to any other customer fully or partially without assigning any reason. 9) The management reserves the rights to divide the quantity offered for sale and allot the material to more than one tenderer. 10) VALIDITY OF LIFTING: The successful tenders have to complete the lifting of the allocated quantity of material within 300 (Three hundred) days from the date of issue of sale order. 11) The offer of the customer would remain valid for a period of 90 (Ninety) days from the date of opening. 12) Loading will be done under the supervision of MRD, the operating agency of the contract. 13) Evaluation criteria are the highest price for whole quantity (12000 Cu.) subject to the price being acceptable to the management of Bokaro Steel Plant. 14).The standard Arbitration Clause of BSL as per the Arbitration and Conciliation act 1996 would be applicable.

Page | 45

IRON SECONDARY STEEL CHEMICALS AND BY PRODUCTS SLAG PIG IRON OTHERS IDLE ASSETS AND U & S ROLLS,STORES ITEMS TOTAL 107641 4938 61 13571 2981

5048 182183

1034 53697

4183

611

4874

9445

85003

407

760608 4837 144554

3635 1237 1229

33

3271

4093

1145973

73549

STATUS OF SALE/DISPOSAL OF SECONDARY MATERIALS/PRODUCTS INCLUDING SCRAP LIFTING OF MATERIALS

&

OTHER

Page | 46

TERMS & CONDITIONS 1) Speed limit of the trucks plying in the plant premises for lifting the material should be restricted to 15 km. per hour. Drivers who will also adhere to slow and safe driving inside the plant and township area will strictly adhere to this limit. 2) The weighment taken at the road weigh Bridge of BSL Will be final and binding for all purposes. 3) The date of delivery is the date of actual physical delivery. 4) The price applicable will be the price prevailing at the time of delivery /dispatch, irrespective of the price quoted in the sale order. 5) The customer can send their representative with appropriate authority / identification letter and a copy of this sale order for taking delivery. 6) Loading of any material by the customer belonging to company which is not contracted to be sold or any wrongful and / or unauthorized removal of the company's property or any attempt to do so will amount to breach of contract and company without any prejudice to remedies available in the civil and/ or criminal Law for such act shall have the right to terminate the contract and impose any penalty as deemed fit by competent Authority. DELIVERY a) On receipt of release order, MRD plans about the number of trucks/trailers to be entertained each day. After ascertaining quantum of different types of scraps to be issued per day, number of trucks/ trailers expected, loading and we ghment facilities available etc. MRD in consultation with marketing intimates to the parties, the likely date of collection so as to deploy their fleet on the dates. b) Wsix of each truck/ trailor is taken before and after loading under strict supervision. c) Gate passes and other related documents are prepared by MRD to help, facilitate the delivery process.

ACCOUNTING a) Finance department scrutinizes each related document and prepare; choice in the prescribed format. b) MRD prepares daily stock and sale report and sends its copies to marketing and finance department.

Page | 47

REFUND OF SECURITY DEPOSITS a) Party has to give an application for closing or cancelling of sale order to marketing department. b) After receiving the application-marketing department prepares closing/cancellation order within three days of receipt of application and issue to all concerned agencies. c) Concerned department and central industrial security force (CISF) issue No dues certificate (NDC) and send to marketing department. If NDC is not received in marketing department within 10 days, it will be considered that the concerned department has no claim on the party, and marketing department takes further necessary steps accordingly. d) After receiving NDC from concerned departments, marketing department issues letter of refund of security deposit to finance department. e) Finance department verifies documents and ensures issue of cheques to party against refund of security within 7 days.

DISTRIBUTION OF SECONDARY PRODUCT The current procedure being adopted by Bokaro Steel Plant for the distribution of rerollables against the fixed price can be explained as follows: Nearly 80% of the material available is offered to the actual consumers/ re-rollers and 20% to scrap processors and others. However, in the event of poor off-take by reroller/scrap processor, the surplus available is offered to the ~ trader as well but to a very limited extent. The status of actual users/ re-rollers is decided on the basis of the necessary certificate issued by the Director of industries of the state. Whenever there is surplus quantity available and the material is heterogeneous in nature, the same is sold through auction/tender on all India basis without making any distinction between the actual users and traders.

BOKARO STEEL PLANT - A PARTNER IN NATION BUILDING Bokaro Steel Plant - the fourth integrated plant in the Public Sector - started taking shape in 1965 in collaboration with the Soviet Union. It was originally incorporated as a limited

Page | 48

company on 29th January 1964, and was later merged with SAIL, first as a subsidiary and then as a unit, through the Public Sector Iron & Steel Companies (Restructuring & Miscellaneous Provisions) Act 1978. The construction work started on 6th April 1968. The Plant is hailed as the countrys first Swadeshi steel plant, built with maximum indigenous content in terms of equipment, material and know-how. Its first Blast Furnace started on 2nd October 1972 and the first phase of 1.7 MT ingots steel was completed on 26th February 1978 with the commissioning of the third Blast Furnace. All units of 4 MT stage have already been commissioned and the 90s' modernization has further upgraded this to 4.5 MT of liquid steel. The new features added in modernization of SMS-II include two twin-strand slab casters along with a Steel Refining Unit. The Steel Refining Unit was inaugurated on 19th September, 1997 and the Continuous Casting Machine on 25th April, 1998. The modernization of the Hot Strip Mill saw addition of new features like high pressure descalers, work roll bending, hydraulic automatic gauge control, quick work roll change, laminar cooling etc. New walking beam reheating furnaces are replacing the less efficient pusher type furnaces. A new hydraulic coiler has been added and two of the existing ones revamped. With the completion of Hot Strip Mill modernization, Bokaro is producing top quality hot rolled product that are well accepted in the global market. Directions Bokaro Steel is working towards becoming a one-stop-shop for world-class flat steel in India. The modernization plans are aimed at increasing the liquid steel production capacity, coupled with fresh rolling and coating facilities. The new facilities will be capable of producing the most premium grades required by the most discerning customer segments. Brand Bokaro will signify assured quality and delivery, offering value for money to the customers. MODE OF SALE 1. 2. 3. 4. 5. 6. E-Auction Sale. Fixed Price Sale. Tendering Process. Interplant Transfer. Transfer to PSU. Bill adjustment/ Book adjustment.

DEFINITION OF KEY TERMS Auction.

Page | 49

Auction refers to a forum where the requirement for one/more lots of an item is stated and the participants (bidders) are required to bid down the price to be selected to supply the requirement. Online Auctions. Online auctions refer to those auctions conducted through the Internet with the bidders (from one or more locations) simultaneously bidding to be selected for supplying the item/s on auction. In other words, the venue for the auction is on an Internet website/ platform. The "Service Provider's" website assigned by "Service Provider" would constitute venue for the purpose of the online auction. Award at the Auction. In a single winner format, only one bidder (normally the bidder who quotes the highest price) is awarded all the units of the item being auctioned. The bidder quoting the highest price is normally allotted the item. Client. Client is the individual/business entity who has contracted "Service Provider" to conduct such auction. In case of auction, the purpose would be the genuine intent to sell the selected items/Lot to the bidders desiring to buy these items from the Client. Bidder. Bidder is the individual/business entity participating in the auction, intending to buy the items/Lots from the Client. To be become a Bidder in the auction, a business entity has to secure client approval for participation and also provide written assent to the General Rules and Regulations Auction Engine. Auction Engine refers to the software that encapsulates the entire auction environment, processing logic and information flows. "Service Provider" is the sole owner of the auction engine and retains exclusive right over the utilization of the same. Timings of the Online Bid. All the timings of the Online Bid shall be based on the time indicated by the Server hosting the Auction Engine. It shall be the endeavour of "Service Provider" to ensure that the Server Time reflects as closely as possible the Indian Standard Time (IST) i.e. GMT + 0530 hrs. However, in the event of any deviations between the Server Time and the Indian Standard Time, the functioning of the Auction Engine

Page | 50

(Launch, operation, and closure) would be guided by the Server Time. Bidders are advised to refresh both the windows of the Auction Module check the exact Server Time (displayed in both the windows). Preview Time. Preview Time refers to the period of time that is provided prior to the commencement of bidding. This is to facilitate approved participants to view the auction details such as item specifications, bidding details and bidding rules. Start Time. Start time refers to the time of commencement of the conduct of the online auction. It signals the commencement of the Price Discovery process through competitive bidding. Duration of the Auction. It refers to the length of time the price discovery process is allowed to continue by accepting bids from competing bidders. The duration of the auction would normally be for a pre-specified period of time. However, the bidding rules may state the conditions when the pre-specified duration may be curtailed/ extended. The conditions include: Curtailment of auction duration in the event of no bids for a specified period of time (Inactivity Time) Automatic extension in the event of bids being entered towards the end of the scheduled duration to facilitate the other bidders to view and react to the bid. Auto Extension of the Auction Timings. In the event of bids in the last few minutes of the scheduled bid time, the Bid Timings are automatically extended for a specified period from each such bid. Such Auto Extension shall continue until no bids are placed for the specified period (Engine remains inactive for the specified period). The Inactivity Time for Auto Extension purpose is normally X minutes. "Service Provider" however retains the right to change the same. The Inactivity Time applicable for the particular Online Bid shall be visible to the bidders under the Bidding Rules module on the engine. End of the Auction. End of the Auction refers to the termination of the auction proceedings signalling an end to the price discovery process. Procedure of E-Auction Advertisement/posting of dates and types of materials to be auctioned in SAIL website and various news papers (Local & National) every 15th to 20th of the month for the next month,

Page | 51

1. Posting of details of lots to be auctioned one week prior to the date of auction, on the website of SAIL and metal Junction.com 2. Inspection of lots to be auctioned by customers. 3. Auction is held on www. Metal Junction.com 4. Report of auction conducted is give by Metal Junction.com 5. Meeting of reserve price opening committee and their recommendation. FLOW CHART OF E-AUCTION

Advertisement of dates/type of materials on SAIL website/Newspaper

Posting of lot details to be auctioned on SAIL / Metal Junction website

Inspection of lots by customers Auction conducted on metaljunction.com

Report of Auction by metaljunction.com

Page | 52

Reserve Price Opening Committee meeting

Recommendations Approval for Sale

GENERAL RULES AND REGULATION GOVERNING CONDUCT OF ONLINE AUCTIONS ON THE SERVICE PROVIDER PLATFORM INTRODUCTION: This Online Forward Auction is being conducted for Bokaro Steel plant, Steel Authority of India Ltd (hereinafter referred as the Client) on the Auction Platform of metaljunction.com, (hereinafter referred as Service Provider). The General Rules and Regulations provided herein govern the conduct of on line Forward Auctions arranged by Service provider on its Auction Platform. These rules cover the roles and responsibilities of the parties in the online Forward Auctions on the Auction Platform. Acceptance in-Toto to these General Rules and Regulations governing conduct of online auctions, and Terms and Conditions for Sale of Materials by tender or online auction, of Bokaro Steel Plant is a pre requisite for securing participation in the online auctions. The key terms pertaining to the online Forward Auctions are provided in the Annexure-D. Prospective bidders are advised to read through the same.

ROLE OF SERVICE PROVIDER Service Provider is the agency (operator) primarily providing the service of the Forward auction to the client. Finalisation of the auction items in consultation with the client.

Page | 53

Collection of EMD, Letter of Interest etc. from the willing bidders and forwarding the same to the Bokaro steel Plant Client. Defining of bidding rules for each auction in consultation with the client. Enhancing bidder awareness of and comfort with the auction mechanism and bidding rules Enlarging the customer base by introducing new bidders. Input of the Auction items and defining the bidding rule in the auction engine. Providing access to the approved bidders to participate in the Auction. Summarising the Auction proceedings and communicate the outcome to the Client.

ROLE OF BIDDER The role of the bidder is outlined below: The bidder would participate in the auction with the aim of bidding to secure the auctioned item in the auction. The bidder would be provided access to the Auction through a User ID protected by a Password. The bidder needs to ensure that the User ID and Password is not revealed to unauthorized persons. Bidders are also requested to change the password allocated to them by the Service Provider to keep their confidentiality. However it would be bidders sole responsibility to ensure the security and privacy of the same and he/they would not hold the Client / Service Provider responsible in any manner whatsoever for any misuse of these user IDs and/or Password. Access to the auction mechanism shall be provided to all the approved bidders subsequent to obtaining their written consent to the General Rules & Regulations and the Letter of Interest. Payment of Earnest Money Deposit (EMD) as decided by the client minimum 3 days before the of the Forward auction will be one of the necessary conditions for participating in the auction. In the event of winning an allotment in the auction mechanism, the bidder shall commit to fulfil outlined obligations under the contract. The bidders shall bid on the terms specified by the client & place their bid in the auction engine in the manner specified by Service Provider. The bidders shall not stipulate any conditions on their own unless the terms of the client (the clients terms & conditions) expressly permit such conditions being stipulated by the bidder. Bids entered with conditions attached shall be considered Conditional bids & service provider retains the right of rejecting these bids even without intimating the client.

Page | 54

BIDDING RULES The Bidding Rules refer to the information and terms defined specifically for a particular auction. The purpose of the Bidding rules is to provide approved bidders with the information and terms specific to the auction in which they are bidding. This would include: Definition of the unit bidding Start Time and duration of the auction. Any extension of the duration of the auction in the event of bids Being received towards the end of the pre-specified duration Start Bid Price Specified Unit for Bidding Price Increments and any reduction in the price increment in the auction in the event of inactivity Other attributes (informational/non-negotiable in nature)

CONDUCT OF THE AUCTION: Only those bidders who have been approved by the Client and handed over stamped and manually signed General Rules and Regulations governing conduct of online auction along with Letter of Interest, required EMD amount and other necessary documents to the Service Provider at least 3 days prior to the start of online auction will be given Login ID and PASSWORD to enable them view and participate in online auction. However a time of 10 working days shall be provided for in-between the date of the On line Auction Notice and the date of On line Forward auction so as to give sufficient time to the eligible bidders to be ready in all respect for taking part in the Online Forward auction. The Auction shall be conducted on pre-specified date. The Key Terms pertaining to the conduct of Auction such as START TIME, DURATION, END TIME AND AUTO EXTENSION FACILITY Shall be specified separately for each Auction. Service provider retains the right to cancel or reschedule the auction, with the approval of the Competent Authority of the Client, on any of the following reasons: The number of confirmed bidders is deemed insufficient to conduct the auction. Some of the confirmed bidders are unable to access the module due to infrastructure problems such as sustained power failure or telecommunication breakdown. There

Page | 55

are no bids, which are equal to or below Start Bid Price. Any other reason which in the opinion of Service Provider / Client requires such action to be initiated. Service Provider with the approval of the Competent Authority of the Client, shall have the right to undertake one or more of the following steps:

Cancellation/ premature termination of the auction with/ without a subsequent rerun of the auction on a mutually decided date Cancellation of a bid Locking / deactivate a bidders account (suspension of operations in the account), etc.

In case of failure of net connection, bidder will give his best price to the Service Provider. Service Provider will bid on behalf of the bidder with the minimum increment until the bid price reaches the best price offered by the bidder, by proxy bidding mechanism. The best price communicated by the bidder will have to be authenticated by written confirmation or fax to the Service Provider and will be kept confidential between the Service Provider and the bidder. Bidder will be bound by the price offered.

LIABILITY OF SERVICE PROVIDER Service Provider shall not be liable to the client/ bidders participating in the auction or any other person(s) for: Any breach of contract by any of the parties in the fulfilment of the underlying contract. Any delays in initiating the online auction or postponement / cancellation of the online auction proceedings due to any problem with the hardware / software / infrastructure facilities or any other shortcomings
RIGHT OF THE CLIENT: The Client reserves the right to partially or totally accept or reject any / all bids placed in the Online Auction without assigning any reason whatsoever. The decision of the client would be final and binding on the bidder in any such case.

Page | 56

CONFIDENTIALITY CLAUSE: Service Provider undertakes to handle any sensitive information provided by the client or confirmed bidders for the auctions conducted with utmost trust and confidentiality. JURISDICTION Any disputes relating to the online auction module shall be subject to the sole jurisdiction of Court of Law having jurisdictions over the Plant from where the materials are being sold. On line Auction conducted at Bokaro Steel Plant shall exclusive jurisdiction of Bokaro Civil Court.

TERMS AND CONDITIONS FOR THE SALE OF MATERIALS BY ON LINE AUCTION / TENDER FROM BOKARO STEEL PLANT MANAGEMENT: The Management will mean the Managing Director, Steel Authority of India Limited, Bo karo Steel Plant or any officer authorized by him to act on his behalf. PURCHASER: The Purchaser will mean the successful bidder whose bid has been accepted under the terms of the online auction/tender process. TERMS & CONDITIONS Bids are accepted on the assumption that the bidder are aware for what they are bidding for that the principle of Caveat Emptor shall apply. The sale is on the basis of AS IS WHERE IS. The materials will be lifted from the site of storage with all faults and errors in description or otherwise, if any. Quantity, Quality, Size measurement, marks and number stated in the tender documents are approximate and no warranty or guarantee should be implied.

TENDER FORMS: The tenderers will sign on each page of the tender documents from Annexure B to E, terms and conditions of sales, schedule etc. in token of acceptance thereof. However, the signature on the tender schedule along with the terms and conditions shall be deemed to be acceptance of all terms and conditions of sale & schedule and other documents forming parts of the on line auction / tender.

Page | 57

Earnest Money: Each tender/ online auction will be accompanied by an Earnest Money Deposit in the form of Demand Drafts/ Pay Order/ Bankers Cheques in the name of Steel Authority of India Limited, Bokaro Steel Plant, payable at any scheduled nationalised Bank at Bokaro Steel City or Chas Branch. The documents shall enclose the Demand Draft/ BC/PO towards the Earnest Money. The intending buyers may submit their documents either personally or through dak / courier to the office of METAL JUNCTION.COM as per Annexure F Any document / application for tender/ online auction received before the publication of the advertisement or after due date and time fixed as per point no 2 of the notice shall not be considered. Successful Bidders will have to pay Security Deposit (SD) @ 3% of the total quantity of material as per bid rate in the form of DD / PO / BC drawn on any nationalised bank in favour of SAIL/Bokaro Steel Plant payable at Bokaro Steel City or Chas within 5 days from the date of issue of Offer Letter for issue of sale order. The material cost along with the applicable ED and Sales Tax etc shall have to be deposited by the buyer in the form of DD / PO / BC drawn on any nationalised bank in favour of SAIL/Bokaro Steel Plant payable at Bokaro Steel City or Chas within 7 days from the date of issue of Offer Letter for the issue of PIM CUM DO. (a) In case the date of online auction becomes a holiday the auction will be o pened on the next working day. (b) The Management reserves the right to accept or reject any or all the online auction/ tenders without assigning any reasons thereof at any stage. (a) Conditional On line auction Auction/Tenders: Conditional bids will not be considered. (a) When the H1 price of a lot/item is approved, the purchaser shall be notified by an Offer Letter, which will be sent on E-mail/Fax/by hand/through courier. The offer letter will indicate full details namely the particulars of the materials, quantity, accepted rate, sale value, sales tax, other taxes, amount deposited towards earnest money and the date of making payment. (b) Security Deposit:. The refund of the security deposit is subject to the satisfactory execution of the order. The Management will be entitled to recover from the security deposit all the money due to the Plant concerning the sale. Payment: On receipt of the Offer letter, the purchaser will deposit the amount as per details indicated in the Offer letter, by Demand Drafts or Pay Order or Bankers cheque, drawn in favour of Steel Authority of India Ltd, Bokaro Steel Plant, payable at Bokaro Steel City or Chas. Cheques/Cash will not be accepted towards payment, however credit note issued by BSL towards balance amount of any previous purchase shall be acceptable only towards material cost and not against Security Deposit..

Page | 58

Extension of Date of Payment: Delay in payment of material value by the buyer may be permitted only for 15 days from the lasst due date of payment as per Offer Letter with an interest @ 24% per annum. No delay in payment will be allowed for security deposit: All taxes / excise duty under the local, state, central or any other law shall be payable by the purchaser in addition to the sale value, as applicable for each item at the rates prevailing on the date of delivery. a) Delivery Order and delivery: - On receipt of payment from the purchaser, BSL will issue a PIM CUM Delivery Order (PIM CUM DO) which will enable the purchaser to take delivery of the materials from the stock holder. The Bidder/ tenderer is required to sign the PIM CUM Delivery order (PIM CUM DO). . b) Actual Delivery/Lifting: The buyer /his authorised representative shall lift the material from the lot/area allotted on the basis of PIM CUM Delivery Order (PIM CUM DO) in terms of tonnage/ number/lot/measurement. c) Weighment: The weighment of material as recorded on BSLs weigh-bridge/reflected in DA/RR shall be final and binding. 12. (a) Delivery time for removal of goods: The delivery of the materials will be effected in situ by the Management. Time is the essence of the contract. The goods sold will be removed by the buyer from the site within validity of the sale order. Delivery of the materials will be made during working hours on all working days on presentation of PIM CUM Delivery Order (PIM CUM DO) by the purchaser to the officer in charge, who may suspend the delivery for a particular period of time for want of any clarification or other technical / operation reasons. (b) The removal of the materials within the stipulated period is not subject to the availability or otherwise of labour, wagons and such other factors as climatic conditions and transport etc. which is the responsibility of the purchaser. (c) However the Management may, consider allowing extra lifting time in special circumstances/ situation when lifting could not be done due to reasons such as strikes, Bandh, failure of loading equipment/EDP computer system or any other unforseen reasons etc. (a) Railway siding facilities: The purchasers may, at the discretion of the Management be permitted to use the Plant siding at the purchasers cost, risk and arrangements, granting of permission is subject to Railway restrictions from time to time. (b) No picking, sorting, cutting, cleaning or breaking up of goods of materials sold will be permitted, except in certain special circumstance where prior sanction for such a permissions has been accorded by the Management. (c) Whenever permitted, the purchaser shall carry out cutting, breaking and dismantling of the sold good for lifting in pieces under the supervision of authorised representative of Loading Unit/Delivery department. 13.

Page | 59

14. Shortage of goods: Where goods are sold in lots and not in number or units, any

reference to the quantity, quality, size, measurement number and wsix in the notice or other documents shall not be a point of dispute and the purchaser shall have no claim against the Management for refund of whole or any part of the purchasers money or for loss of profit, of interest, damage or otherwise. 15. 16. Re-Sale: The Management will not recognize Re-Sale. Sale Orders and release orders will be made out only in the name of actual Bidder or tenderer. Custody and preservation of goods after sale : The materials shall remain in every respect at the risk of the purchaser from the date of Sale Order is issued to the purchaser. The Management shall not be under any liability for the safe custody or preservation thereof from that date.

17. (a) Withdrawal of goods from sale: The Management reserves the right to withdraw at any stage from the sale after advertising or after issue of Sale Order/ Release Order any items or any quantity of the materials by number or wsix without assigning any reasons thereof to the purchaser. Sale Value for the materials so withdrawn, if any, paid by the buyer, will be refunded. SAIL / BOKARO Steel Plant reserves the right to reject any or all applications / offers partially or fully at any stage of the process / tenure or modify the process / tenure or any part / term thereof any time without assigning any reasons No financial obligations, whatsoever, shall accrue to Sail / BSL in such an event. (b) The Management reserves the right to dispose off any item by other means even after inviting Bidding/tenders for sale of such materials. 18. Abandoned Goods: The purchaser must effect complete removal of the materials sold to them from the site within the date specified in PIM CUM Delivery Order (PIM CUM DO) issued by the Management. In case the material is not removed in full within the specified / extended date, delivery order for the left over quantity will be treated as cancelled. The materials so left over will be treated as Abandoned Goods, at the risk and cost of the buyer. 19. Damage to Plant Properties: The purchaser shall be fully responsible for any loss/ damages that may be done to the premises, equipments, machineries, and other installations of the Plant or person in the course of removing the lot/ items bought by him, and the purchaser is fully liable to reimburse to the Management the cost of such damages. The Management fully reserves the right to recover the cost of such damages from any sum due to the purchasers or through legal action whatsoever. 20. Entry Passes to the Plant: Admit / Area/ Gate Passes are issued to the representative of the purchaser by the officials of CISF, Bokaro Steel Plant, on the recommendation of the Custodian. The purchaser and their workers should not move about freely in the Plant, or Places other than they are required to visit for the purpose of lifting of materials purchased.

Page | 60

21. Compliance of Labour Laws Safety Rules: During the period of the purchasers workers

are employed within Bokaro Steel Plant Bokaro premises, they will be governed by the Labour Law and Rules, Factory Act and Rules and Bokaro Steel Plant Security Rules & Safety Rules as applicable and it shall be the responsibility of the purchaser to ensure that the statutory provisions are complied with fully. 22. Recovery of Dues: Any sum of money due and payable to the purchaser including Security Deposit (returnable to him under this contract) may be appropriated by the Steel Authority of India Limited, Bokaro Steel Plant or Government or any other person or persons, including other Steel Plants under SAIL and adjusted against any claim of the Steel Authority of India Limited, Bokaro Steel Plant. 23. Payment of Interest: No interest will be paid on the amount paid by the Purchaser and subsequently found refundable under any of the condition mentioned herein. 24. Illegal Gratifications: Any bribes, commission, gifts or advantage given, promised or offered by or on behalf or the tenderer or his partner agent or servant or any one on their behalf to any Officer, servant representative.

FLOW CHART OF FIXED PRICE

Advertisement of type of materials on SAIL website/Newspaper

Application from customers

Allocation of material

Page | 61

Issue of offer letter

PRIORITY IN BOOKING OF MATERIALS BY MARKETING DEPTT Cate gory A Prio rity 1st Buyer Govt. Units/PSUs & its subsidiaries & joint ventures of govt.units having more than 50% govt. share Quantity allotted to be

Any quantity required by them

2nd

Dependent BIADA units with MD/BIADAS recommendations & MD/BSLs approval.

Maximum 70% of the balance available quantity after meeting the 1st priority 30% of balance

3rd

Consumers/Processes Jharkhand state

of

Page | 62

4th

To all other customers

Out of the balance quantity of material left if any

TENDER DOCUMENT TERMS & CONDITIONS1) The parties desirous of purchasing the material have to quote for entire quantity of the material. 2) The tenderers are advised to inspect the material at B.F. Slag Dump, if so desired, before submitting the quotations. 3) Terms of sale: On " As is where is basis ", " No complaint basis " and " Ex-works basis" No PICK and CHOOSE shall be allowed other than sorting out Iron/Steel pieces found, if any. 4) 5) The conditional quotations are liable to be rejected. EARNEST MONTEY:

EMD (Earnest Money Deposit) Rs 100000/- for the item to be deposited in the form of DD/BC/PAY ORDER in favour of SAIL/Bokaro Steel Plant payable atBokaro from any Nationalised / Scheduled banks along with the quotations. Any variation / demand in such taxes, duties, levies, and charges and / or any fresh imposition of such taxes, duties, levies and charges shall also be to the account of the bidder to whom the tender is awarded. The tenders should quote their rate in per cubic meter against the total quantity as asked for in the tender document both in words and figures. In case of any mismatch / ambiguity between the two the higher of the two rates only shall be considered. The tender should be submitted in the TENDER BOX placed inside the CONFERENCE HALL OF MARKETING AND STRATEGIC PLANNING DEPARTMENT on the 5th floor of ISPAT BHAWAN. The general terms and conditions of lifting by road and safety stipulations in force shall be applicable. 6). PAYMENT TERMS: The successful bidder has to make payment for the quoted quantity in 12 (twelve) equal installments of 1000 Cu.m each. 1st installment is to be deposited within 10 (Ten) days from date of issue of sale order inclusive of the date of issue of sale order. Subsequent installments are to be deposited within 30 (Thirty), 50 (Fifty), 70 (Seventy), 90 (Ninety), 110 (One hundred ten), 130 (One hundred thirty), 150 (One hundred fifty),

Page | 63

170 (One Hundred seventy), 190 (One hundred Ninety), 210 (Two Hundred ten) & 230 (Two Hundred Thirty) days from the date of issue of sale order (inclusive of the date of issue of sale order). However, lifting of entire quantity of material has to be completed within the validity period of 300 (Three Hundred) days from the date of issue of sale order (inclusive of the date of issue of sale order). Payments shall be in the form of DD/BC/Pay order or acknowledgement note from SBI, IFB commercial, Branch of Raipur /Bokaro payable atBokaro from any of the Nationalised / Scheduled banks in favor of SAIL /Bokaro Steel Plant. Incase of failure of payment as mentioned above and or failure in lifting of material within the validity period of lifting, the Management reserves the right to cancel the sale Order and forfeit the security deposit. 7) LOADING AND TRANSPORTATION: Loading and transportation of the material in the tenderer vehicle has also to be done by the tenderer at their own cost and arrangements.Successful customer will be allowed to lift the material only 4 days in a week. 8) Bokaro Steel Plant reserves the right to accept or reject any of the tenders or all the tenders or award contract to any other customer fully or partially without assigning any reason. 9) The management reserves the rights to divide the quantity offered for sale and allot the material to more than one tenderer. 10) VALIDITY OF LIFTING: The successful tenders have to complete the lifting of the allocated quantity of material within 300 (Three hundred) days from the date of issue of sale order. 11) The offer of the customer would remain valid for a period of 90 (Ninety) days from the date of opening. 12) Loading will be done under the supervision of MRD, the operating agency of the contract. 13) Evaluation criteria are the highest price for whole quantity (12000 Cu.) subject to the price being acceptable to the management ofBokaro Steel Plant. 14).The standard Arbitration Clause of BSL as per the Arbitration andConciliation act 1996 would be applicable. MAJOR COMPETITOR'S 1). HPCL 2).ONGC 3). IPCL 4).JINDAL STEEL WORKS 5). TATA IRON AND STEEL CORPORATION (TISCO).

Page | 64

6). ESSAR STEELS. CUSTOMER LIST 1. Ma Durga Ispat Udyog, Bokaro 2. Bokaro Development Area 3. Kartike Ispat Pvt. Ltd, Kanpur 4. Amit Steel Corporation, Hawra 5. Diwan Steel, New Delhi 6. Nenu Mal & Sons, Kanpur 7. Bhawani Metals, B.S.City 8. Birma Industrial & Business Enterprises Pvt. Ltd, Ranu 9. Pandey Brothers, Chas 10. Chinar Steel Segments, B.S.City 11. Mangal Pvt. Ltd., Bokaro 12. United Iro Coporation, Dhanbad 13. Bharat Supply Company, Kolkatta 14. Anup Steels, Delhi 15. Hanuman & rise Pvt. Ltd, BIADA 16. Amit Metcum Pvt. Ltd. 17. Steel India, Dhanbad 18. Kunal Steel Coperation, Ludhiana 19. GD Goel & Company, Kokatta 20. Modern Indua concast Ltd, Kolkatta 21. Agarwal Steel Centre, New Delhi

Chapter 8.
RESEARCH METHODOLOGY OF THE STUDY
Type of Research- Descriptive Research Data SourcePrimary Data: Interview, Questionnaires.

Page | 65

 Secondary Data: Internet, previous and current records and published by BSL. Sampling technique- Convenience sampling Data collection Tools- Questionnaire method Area of study- Bokaro district Population- Customers in the towns of Bokaro district Sample Size- 25 customers Data analysis and interpretations using percentage analysis

magazines

PRICING STRATEGY: Pricing strategy is the price planning that takes into view factors such as firms overall marketing objectives, consumer demand, product attributes, competitors pricing and, market and economic trends.
1.

OPERATIVE DEFINITION: The term pricing strategy here means the link between BSL objectives, financial goals, brand promise, merchandising strategies and price on the shelves of Secondary and By-products taking into consideration the strategy of its competitors. SALES STRATEGY: Sales strategy is the planned approach- management, policy formation, prospect identification and qualification, sales presentation and order generation aimed at achieving a firms sales quotas or targets.
2.

OPERATIVE DEFINITION: The sales strategy in this research is referred to as the sales presentation, prospect identification, policy formation, order generation of BSL aimed at achieving BSL sales targets. Their aim to achieve sales targets of Secondary and By-products is studied here.

Page | 66

Chapter 9. DATA ANALYSIS AND INTERPRETATION

Classification of customers Trader 6 Manufacturer 14 Processor 3 Others 2

Interpretation The above graph shows the different category of customers for secondary and by-products. Manufacturers were found to be highest among the different types of customers.

Page | 67

Reason for purchase from BSL Quality 11 Cheap transportation 7 Local market 5 price 2

Interpretation It was found from survey that most of the customers of secondary and byproducts prefer to purchase from BSL because of local market and quality.

Satisfaction with respect to quality Yes 23 No 2

Page | 68

23

Interpretation Most of the customers of secondary and by-products of Bokaro Steel Plant are satisfied with the quality of the product.

Types of products purchased by customers Secondary steel 10 By-products 11 Slag 3 Idle assets 1

Page | 69

Interpretation Most of the customers of secondary and by-products in Bokaro district deals with the secondary steel and by-products. Though idle assets and slag also generate huge revenue to Bokaro Steel Plant but there are only few customers of idle assets and Slag are in Bokaro district. Brand familiarity Yes 18 No 7

Page | 70

Interpretation The customers of secondary and by-products are dealing mainly with two brands. Most of the customers are dealing with BSL and TATA steel both. Some customers are dealing with BSL and ISPAT steel and ESSAR steel.

Reason for selecting more than one company Low price 4 High quality 7 Better service 5 better selling methods 1 others 1

Page | 71

Interpretation The diagram indicates the reason for selecting more than one company for purchase of secondary and by-products. Most of the customers prefer due to high quality of secondary and by-products in other steel plant while some prefer other steel plant because of better service that they get in other steel plants.

Difference in price between BSL and other steel plants Yes 20 No 5

Page | 72

Interpretation This clearly indicates that there is a price difference between BSL secondary and by-products to other steel plants. Hence, to be in competition with other steel plants secondary and by-products, BSL has to decrease its price of products. Since, cost conscious customers always go for a brand that serves his purpose at a minimum cost. Difficulties while dealing with BSL Yes 14 No 11

Page | 73

Interpretation Most of the customers find difficulties while dealing with Bokaro Steel Plant. Most of them find lack of single window system while dealing with BSL. This leads to slow process of trading. Some customers also want better customer service. Any better selling adopted by other steel plants? Yes 3 No 22

Page | 74

Interpretation Most of the customers believe that the current selling methods adopted by Bokaro Steel Plant are good. Only 3 customers found better selling methods adopted by other steel plants. Complain registered Yes 11 No 14

Page | 75

Interpretation Most of the customers do not complain about the problem they faced while trading with BSL because they dont feel management will be serious about their problems. So, customers confidence towards management of BSL should be increased. Complaints executed Yes 7 No 4

Page | 76

Interpretation Only 11 customers said that they registered their complaints about the problem they faced in trading with BSL. Out of which 7 said that their problems are executed. So, BSL is friendlier towards customers.

Types of by-products purchased Benzene 9 toluene 5 S.B.oil 3 Ammonium sulphate 9 Hard medium pitch 1 extra hard pitch 1 L.S. Naptha 2

Anthracene oil 2

Page | 77

Interpretation To get the information about types of by-products purchased by customers is also very important. Since, each customer buys different types of by-products. Most of the customers buy more than one by-products.

No. Of years while trading Below 2 years 4 2years-4years 5 above 4 years 16

Page | 78

Interpretation Of the customers of Bokaro steel plant secondary and by-products most of them are trading with more than 4years. This may be the reason for the large customer base of BSL in secondary and by-products market. Pricing method preferred Fixed price 4 e-auction 21

Page | 79

Interpretation Most of the customers prefer e-auction because it is easy and fast method for trading unlike other methods. Customers get their value for the time they spent in trading in e-auction Mode of transportation Railways 7 roadways 18

Page | 80

Interpretation From the survey it was found that most of the customers of BSL are using roadways for transporting materials from Bokaro steel plant because most of them are purchasing secondary steel and that are mostly transported through roadways in local market. Main benefits received from BSL Quality 15 Price 3 Availability 9 Transportation 7 discount structure 4

Page | 81

Interpretation The main benefits customers receive while trading with Bokaro steel plant is quality of secondary and by-products. Availability of products is 2nd major benefits that are received by customers. Most of them receive a combination of benefits from BSL. Does volume limit satisfy needs of customers? Yes 7 No 13 Somewhat 5

Page | 82

Interpretation The above graph shows the satisfaction level of customers regarding volume limit for the purchase of secondary and by-products. Most of the customers are not satisfied with the volume limit of products. Experience with marketing personnel Good 22 Bad 2 Excellent 1

Page | 83

Interpretation This indicated the experience of customers with the marketing personnel while trading with BSL. Most of the customers are having good experience with the marketing personnel. Few customers are having bad experience with marketing personnel. Accessibility of Information about bids to be taken place Highly dissatisfied 2 dissatisfied 4 neutral 5 satisfied 13 highly satisfied 1

Page | 84

Interference The accessibility of the information about the bids to be taken place is very important because it increases the number of customers in the bids and hence market becomes competitive. Most of the customers are satisfied about the accessibility of the information. Order handling procedure of BSL Good 20 bad 2 poor 2 excellent 1

Page | 85

Interpretation From the survey it was found that most of the customers of Bokaro steel plant are happy with the order handling procedures of Bokaro steel plant. Since, there is a lot of competition in market for selling of secondary and by-products. So, for being in the competition with other steel plants BSL is having good order handling procedure and that will make his customers happy.

Satisfaction with price of secondary and by-products Yes 12 no 13

Page | 86

Interpretation Price is one of the most important factors which customers are taking in consideration while purchasing products. From the survey it was found that customers are not happy with the price of the product. Hence, BSL should decrease its price of the products.

Satisfaction with the current selling methods of BSL Yes 21 no 4

Page | 87

Interpretation The customers of secondary and by-products in Bokaro steel plant are satisfied with the current selling methods of Bokaro steel plant. Some of the customers are not satisfied with the current selling methods of BSL but they are not able to give proper reason for their dissatisfaction. Overall Experience while dealing with BSL Highly dissatisfied 2 dissatisfied 3 neutral 8 satisfied 10 highly satisfied 2

Page | 88

Interpretation The above graph shows the experience of customers while dealing with Bokaro steel plant. Most of the customers said that they are satisfied with the experience while trading with BSL. But, there are a large number of customers who also said that they are not happy with BSL.

Chapter -10.

Page | 89

SUMMARY OF FINDINGS

1. Most of the customers belong to the category of manufacturers i.e. they are using secondary and by-products of BSL as a raw material. 2. Majority of customers prefer to purchase secondary and by-products from Bokaro steel Plant because of local market and quality but they find price is higher compared to the quality.

3. Majority of the customers are satisfied with the quality of the secondary and by-products of BSL and that is a big advantage for BSL.

4. Of the four major types of products produced by BSL in Secondary and byproducts division, most of the customers are purchasing secondary steel and byproducts from BSL.

5. Most of the customers deal with Bokaro steel plant and TATA steel for purchase of secondary and by-products.

6. Low price, better service and high quality are the major concerns that the customers looks into for preferring a particular steel plant for secondary and byproducts.

7. Majority of customers responded that other steel plants are providing secondary and by-products at a lower rate.

Page | 90

8. Most of the Customers responded that they find difficulties while dealing with BSL.

9. E-auction is the most reliable selling method and majority of customers are happy with it. The other methods of selling adopted by BSL like tender, fixed price are same as the other steel plant and customers are satisfied with those selling methods.

10. Most of the customers dont register complain about the problem they faced during purchase but majority of customers who registered their complain get solution for that. So, BSL has to increase the confidence of customers on them.

11. Among by-products category of products Benzene, Toluene and Ammonium sulphate are having highest number of customers.

12. Most of the customers are loyal to BSL because most of the customers are dealing with Bokaro steel plant for more than 4 years.

13. Roadways are the most common mode of transportation used by customers because all belongs to local market. Some of the customers are using Railways for the transportation because by-products are mainly transported through railways.

14. Quality, availability and transportation are main benefits that the customers of secondary and by-products of BSL receive from Bokaro steel plant. Only few customers responded that price and discount are the benefits they receive from BSL.

Page | 91

15. Most of the customers are not happy with the volume limit that they receive from BSL.

16. Most of the customers responded that they are satisfied with the information provided by BSL about the bids to be taken place but few customers are also not happy with the information provided by BSL.

17. Majority of the customers responded that they are happy with the order handling procedures of BSL.

18. Majority of the customers responded that that they are satisfied with the overall experience while dealing with Bokaro Steel Plant.

Page | 92

Chapter 11.

CONCLUSIONS AND RECOMMENDATION

The main issue attached with Bokaro Steel Plant secondary and by-products is that most of the customers finds its price higher than the other brands of secondary and byproducts available in the market. Since, customers are now conscious about cost cutting measures so they other brands over BSL. Local market is one of the most important advantages than BSL is enjoying over a period of time but, due to set up of new steel plants in nearby places few years from now it will no longer be an advantage for BSL. So, BSL should have to work on decreasing the price of its secondary and by-products and also increase its quality.

Page | 93

Since, from the survey it was found that most of the customers are purchasing secondary steel and by-products from BSL. So, BSL should have to work on the increase of production of these products and also decrease the price of those products to be competitive in the market. Most of the customers are also purchasing secondary and by-products from TATA steel because of the lower price and easy method of purchase although TATA steel is far from Bokaro district because of better service. So, Bokaro steel plant should have to work on to provide better service for customers. Since, majority of customers dont register complain about the problem they faced during trading although most of the problem that are registered got executed. Hence, BSL should have to work on to improve confidence of customers on them. Benzene, Toluene and Ammonium sulphate are having highest consumption among by-products. So, products of mainly these by-products have to be increased. The BSL secondary and by-products customers are having faith in the quality of these products. So, this should be maintained at any cost and BSL should have to decrease the price of its secondary and by-products to maintain its customer base.

Chapter 11. SUGGESTIONS

1. The pricing as we well as the distribution policies should be framed by keeping in mind the requirements of the complete range of manufactures and not only the bulk consumers. This will encourage the new re-rolling mills to approach BSL for the material.

Page | 94

2. Ensure delivery of the material for which the payment is accepted so that mills are not closed or shut down for want of material. 3. Alternatively if the material is not available the BSL authorities should not accept the payment so that the buyer can approach some other source for procuring the material and should not unnecessarily wait for the material, which is not available. 4 . Representative from the member of the rolling mills association can be introduced in the committee formed for pricing the various secondary products. That representative holds the complete picture of the products as placed in the market and the prices fixed with his consent will be on rational grounds and acceptable to all. 5.Price of the material for which 100% payment has been received as advance should not be changed if the delay in the lifting of the material by the party is due to some fault of BSL but if is due to deliberate delay in lifting the material by the customer than the same policy should be applicable. 6. When the customer having rolling mill of a smaller size purchase material, which are rolled in a bigger rolling mills than this, clearly indicates that the material is being purchase for trading. This practice can be prevented if BSL obtains a copy of certificates issued to the owner of every mill by the District industry centre specifying the size of the mill. 7. BSL can appoint 2-3 authorized stockiest also to avoid trading practice. In this way the benefit of break up pricing can be passed on to the one for whom these have been framed i.e. the actual re-rollers. 8. Price list made available to the various re-rollers every month by BSL should count all the items but it should clearly indicate the material which is not available so that the customers requiring that particular material can approach some other source.

9. The infrastructure facilities at the disposal yard should be maintained properly and needs improvements so that the pace of the lifting process be increased.

Page | 95

10. The management should see that the actual stock is lifted is more thanwhat is arising. To achieve this goal it is quite necessary that lifting of the materials may start from the early hours and be extended to evening hours.

11. Induction of computers in marketing department. 12. Proper packing is to be done to safeguard the materials from damage, which is occuring due to multistage handling and transportation. 13. Creating product awareness through print media, hoarding, industrial magazines etc.

Chapter 12 BIBLIOGRAPHY
Books referred Kotler Philip, Keller Kelvin, Koshy Abraham, Jha Mithileshwar; Marketing Management; New Delhi, Published by Dorling Kindersley (India) Pvt. Ltd. Malhotra N.K., Marketing Research- An applied orientation, New Delhi, Prentice Hall of India Private Ltd.

Page | 96

Magazine published by SAIL Training manual Books of organization

SAIL JOURNAL (Weekly, Jan-May08) SAIL NEWS MAGAZINES(15 January,2006-07) B.S.L. NEWS MAGAZINES(15Nov07) STEEL SCENARIO JOURNAL (Bokaro Darpan,weekly,Jan-May08) MARKETING PERFORMANCE REPORT (Apr06-March07)

Websites referred:
www.sail.co.in www.metaljunction.com www.steelrx.com

Chapter 14.

ANNEXURE
QUESTIONNAIRE

Page | 97

1. In which category of customer do you belong? a) Trader b) Manufacturer c) Processor d) Others 2. Why do you prefer to purchase from BSL? a) Quality b) Cheap transportation c) Local market d) price 3. Are you satisfied with the quality of the product? a) yes b) no 4. If No then what would be the reason for such a decision? a) High cost b) Low quality c) Poor distribution d) Others(please specify)

5. What type of products do you purchase from BSL? a) Secondary steel b) By-products c) Slag

Page | 98

d) Idle assets 6. Are you dealing with any other company other than BSL? a) Yes. (please specify the name) b) No 7. If Yes then what would be the reason for selecting other company? a) Low price b) High quality c) Better service d) Better selling methods e) Others. (please specify) 8. Do you find any difference in price of secondary and by-products of BSL with other plants that you are dealing with? a) Yes b) No 9. Have you faced any difficulties while dealing with the BSL? a) Yes (Please specify the reason) b) No 10. Do you find better selling methods adopted by other plants for selling of secondary and by-products? a) Yes.. (please name that method) b) no 11. Did you complain about the problem faced? a) Yes b) No

Page | 99

12. Did complains get executed? a) Yes b) No 13. Which types of by-products do you deal with? a) Benzene b) Toluene c) S.B. Oil d) Hard medium pitch e) Extra hard pitch f) L.S. Naphtha g) Anthracene oil h) Ammonium sulphate 14. Since when you are dealing with BSL? a) Below 2 years b) 2years-4 years c) Above 4 years 15. What type of pricing method preferred by you while you are dealing with the BSL? a) Fixed price b) E- auction 16. What mode of transportation are you using? a) Railways b) Roadways

Page | 100

17. What are the main benefits which you receive from BSL? a) Quality b) Price c) Availability d) Transportation e) Discount structure

18. Does the volume limit of secondary products, for bidding, help satisfy your needs? Yes No Somewhat

19. What is your experience with the marketing personnel? Good Bad Excellent

20. Overall how will you rate the accessibility about bids to be taken place? (Rank on scale on 1-5 in which 1 means highly dissatisfied and 5 represents highly satisfied) 1 2 3 4 5

21. How do you rate the order handling procedure of the BSL? Good Bad Poor Excellent

22. Are you satisfied with the price of the secondary and by-products? a) Yes b) No 23. Are you satisfied with the current selling methods of BSL?

Page | 101

a) Yes b) No(please specify the reason) 24. Overall how will you rate your experience while dealing with the BSL? (Rank on scale on 1-5 in which 1 means highly dissatisfied and 5 represents highly satisfied) 1 2 3 4 5

Any suggestions for further improvement:

Thank you for your sincere co-operation. NAME OF THE CUSTOMER- PLACE- . DATE- .... CONTACT NO. -

Page | 102

Page | 103

Chapter 13.

Company Profile
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. Ranked amongst the top ten public sector companies in India in terms of turnover, SAIL manufactures and sells a broad range of steel products, including hot and cold rolled sheets and coils, galvanized sheets, electrical sheets, structurals, railway products, plates, bars and rods, stainless steel and other alloy steels. SAIL's wide range of long and flat steel products are much in demand in the domestic as well as the international market. This vital responsibility is carried out by SAIL's own Central Marketing Organization (CMO) and the International Trade Division. CMO encompasses a wide network of 38 branch offices and 47 stockyards located in major cities and towns throughout India. Headquarters in Calcutta. Almost all plants and major units are ISO Certified.

JOINT VENTURE
SAIL has promoted joint ventures in different areas ranging from power plants to ecommerce.

NTPC SAIL Power Company Pvt. Ltd

Set up in March 2001, this 50:50 joint venture between SAIL and the National Thermal Power Corporation (NTPC) operates and manages the Captive Power Plants-II of the Durgapur and Rourkela Steel Plants which have a combined capacity of 240 MW.

Bokaro Power Supply Company Pvt. Limited : This 50:50 joint venture between SAIL and the Damodar Valley Corporation formed in January 2002 is managing the 302-MW power generation and 1880 tonnes per hour steam generation facilities at Bokaro Steel Plant.

Page | 104

Bokaro Electric Supply Company Pvt. Limited: 150 Another SAIL-NTPC joint venture on 50:50 basis formed in March 2002 manages the 74 MW Power Plant-II of Bokaro Steel Plant which has additional capacity of producing tonnes of steam per hour.

UEC SAIL Information Technology Limited

This 40:60 joint venture between SAIL and USX Engineers & Consultants, a subsidiary of the US Steel Corporation, promotes information technology in the steel sector.

Metaljunction.com Private Limited

A joint venture between SAIL and Tata Steel on 50:50 basis, this company promotes ecommerce activities in steel and related areas.

SAIL-Bansal Service Center Pvt. Ltd.

SAIL has formed a joint venture with BMW industries Ltd. on 40:60 basis to promote a service centre at Bokaro with the objective of adding value to steel.

OWNERSHIP AND MANAGEMENT The Government of India owns about 86% of SAIL's equity and retains voting control of the Company. However, SAIL, by virtue of its "Navratna" status, enjoys significant operational and financial autonomy Raw Materials SAIL has the second largest mining outfit in the country after Coal India Limited. Spread over the states of Jharkhand, Orissa and Madhya Pradesh, the mines of SAIL started their operations as captive sources of raw materials for its integrated steel plants. Iron ore, Manganese ore Fuels and reducing agents Coal, Coke, petro fuels

Page | 105

Fluxes Limestone, Dolomite, Quartzite Refractories Silica, Magnetite, Alumina

Imported Ash in Indian coals is in the range of 19-20% and, that from imported sources, in the range of 8-10%.

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.

Product Wise Semis Blooms, Billets & Slabs Long Products Structural Crane Rails Bars, Rods & Rebars Wire Rods HR Coils, Sheets & Skelp Plates CR Coils & Sheets GC Sheets\ GP Sheets and Coils Tinplates Electrical Steel HR Coils, Sheets & Skelp Plates CR Coils & Sheets GC Sheets\ GP Sheets and Coils

Flat Products

Flat Products

Page | 106

Tinplates Electrical Steel Pipes Rails Wheels, Axles, Wheel Sets

Tubular Products Railway Products

Plant Wise Bokaro Steel Plant HR Coils & Sheets Plates CR Coils & Sheets GP Sheets & Coils/ GC Sheets Pig Iron, Chemicals & Fertilizers Blooms, Billets & Slabs Joists, Channels, Angles Bars, Rods & Rebars Skelp Wheels, Axles, Wheel Sets Pig Iron, Chemicals & Fertilizers HR Coils Plates CR Coils & Sheets GP Sheets/ GC Sheets Tinplates Electrical Steel Pipes Pig Iron, Chemicals & Fertilizers

Durgapur Steel Plant

Rourkela Steel Plant

Products

Page | 107

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.

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.

Plates
Steel plates are used mainly for the manufacture of bridges, steel structures, ships, large diameter pressure vessels. The company also produces weatherproof steel plates for the construction of railcars.

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.

PRESENT SCENARIO OF COMPANY

Page | 108

SAIL had received excellent rating for achieving targets set in the MoU with the Government for the year 2007-08. Considering the sustained growth demonstrated by the company during 2008-09, a similar rating is expected this year as well.

During 2008-09, while maintaining capacity utilisation at 104%, the company focussed on the production of finished steel, lower energy consumption and reduction in coke rate, increased production through the continuous cast (CC).

PRODUCTION Sales of 11.32 million tones a decrease of 8% as compared to previous year.

Semis component in sales of saleable steel reduced to 12 % [ 5 ISPs] -a decrease 1% as compared to previous year. Saleable steel production of 12.50 million tones -a decrease of 4% as compared to previous year. Hot Metal production of 14.44 million tonnes -a decrease of 5% as compared to previous year. Crude steel production of 13.41 million tones -a decrease of 4% as compared to previous year. Special Steel Production 3.7 million tones -an increase of 11% as compared to previous year. Production through Concast 8.9million tones -a decrease of 1% as compared to previous year. Coke Rate at 521 kg/T -lower by 2% over CPLY. Fuel Rate at 563 (kg/thm) lower as compared to CPLY. Energy Consumption 6.74 (G.Cal/tcs) lower by 3% Over Corresponding Period LaYear. Avg. Capacity utilisation (Hot Metal)105% Avg. Capacity utilisation (Concast Production)127%

Page | 109

Avg. Capacity utilisation (Saleable Steel)113%

FINANCIAL FEATS SAIL recorded highest-ever profit before tax of 5,739 crore during April-December 04 against the Rs. 1,544 crore achieved in the corresponding period of the previous year. This was a whopping growth of 272%. Quarter wise, there was progressive improvement from Rs. 1,205 crore in Q1 to Rs. 1,823 crore in Q2 and to Rs. 2,711 crore in Q3 despite stability in steel prices during the period. Q4 performance is also expected to be encouraging. SAIL reduced its overall debt from Rs. 15,082 crore (year 2000) to a level below Rs. 6,000 crore as on 31.3.06. The company achieved a reduction of about Rs. 4,800 crore in the market borrowing during 2008-09 through improved physical and financial performance, resulting in healthy internal accruals, interest cost/finance charges during FY 08 were also lower by about Rs. 300 crore. COST EFFECTIVENESS The thrust on improving efficiency of cost management launched by SAIL during the downturn in the steel sector continued during the year. New schemes were identified and existing schemes reviewed and revised to offset the impact of the sharp rise in input prices, particularly in the case of coking coal, ferro alloys, etc., during the year, resulting in savings of about Rs. 130 crore. MARKETING MUSCLE Consumption of finished steel in the country is estimated to have crossed the 33 MT mark during 2008-09 a growth of about 6% over the previous year. In the line with the increased level of consumption, SAIL established a new domestic sales record of 10.3 MT, an increase of 8% over the achievement of the previous year. To ensure higher availability of steel in the domestic market, SAIL consciously contained exports at a minimum level during the year. The company shipped only about 4 lakh tones of steel during the year against 11 lakh tones in 2007-08. SAIL sold a total volume of 9.8 MT of finished steel during 2008-09 recording a growth of 9%. The major product categories in which sales growth took place were plates (42%), HR coils (9%), TMT (50%), wheels & axles (43%) and heavy structurals (30%). Supplies of rails to the Indian Railways increased by 6% over the previous year to 10.3 lakh tonnes, including long rails up to a length of 78 meters. HUMAN RESOURCE MANAGEMENT

Page | 110

Around 4,700 employees separated from the company during FY 08, around 1,440 voluntarily. SAILs total manpower at the end of the year thus stood at around 147,000, showing a reduction of about 48,000 since 1998. The companys labour productivity grew by 8% to 162 tonnes /man /year in 2008-09. To equip employees with higher technical skills, SAIL has signed the following:

BUSINESS PLAN Hot metal production to increase from the present level of 13 MT to 20 MT. Saleable steel output from the 4 integrated steel plants to go up from 10.7 MT to 17.4 MT. Finished steel component to increase to a level of 96% of total steel produced. 100% steel production through BOF-CC route. Increasing product capacities in growth segments like construction, cold reduction and oil and gas sector. Development of mines to meet enhanced requirement of iron ore and fluxes. RESEARCH & DEVELOPMENT R&D projects undertaken during 2008-09 focused on process improvement, cost competitiveness, product quality, product development and basic research for improvement in techno-economic parameters to increase capacity utilization. Major initiatives aimed at cost competitiveness included: Improvement in lining life of converter to 2,000 heats in SMS-II at RSP including steel ladles at RSP & BSL by technological initiatives. Raising productivity of DSP Sinter Plant to 1.36 tones/m/hr (peak 1.6 tones). Increase in BF productivity at RSP by process changes in furnace working from peripheral working, reversal off BLT matrix and other changes in charging system. Technological initiatives like hot charging of wheels, modification of ingot design, etc., helped in record production of wheels & excles at DSP. Reduction in HSM roll spalling at BSL. Measures to obtain increased campaign length and reduced roll consumption at BSL. Installation of automation of hot saws in BSLs Rail & Structural Mill.

INVESTMENT

Page | 111

SAIL has estimated that the measures to be taken to achieve the targeted levels of growth and sustain higher levels of cost and quality competitiveness will require investment in the region of Rs. 25,000 crore by 2011-12. The immediate priority schemes, to be taken/completed by 2008-09,have been estimated to be around Rs. 17,714 crore. The plan for capital expenditure covers upgradation/modernization of some existing assets as well as installation of some new facilities. The areas broadly identified for investment pertain to:

Development of iron ore mines Rebuilding Coke Oven Batteries at BSL, DSP Revamping of iron & steel making facilities at BSL, DSP and BSL Installation of one blast furnace at RSP Installation of auxiliary fuel injection systems in all blast furnaces in a phased manner

Among new finishing mills planned to be set up are: BSL: DSP: RSP: BSL: Thin slab casting/inline Hot Strip Mill (1.1 MT), Bar & Rod Mill (1 MT), Pipe Plant (0.2 MT) Bar & Rod Mill (1.4 MT), Structural Mill (0.4 MT) Plate Mill (0.7 MT), CRNO Mill (0.075 MT) Hot Strip Mill (2.5 MT), CRM Line (0.6 MT)

Source: www.sail.co.in/aboutus.php?tag=company-aboutus.
Source:

IMPROVED COST & QUALITY COMPETITIVENESS: COST COMPETITIVENESS: (a) Reduction in fixed cost through volume growth, reduction in manpower cost and financial charges; (b) reduction in variable cost through technological interventions like elimination of ingot

Page | 112

steel route, 100% Basic Oxygen Furnace and Continuous Casting, coke rate reduction via CDI/auxiliary fuel injection, and higher levels of process control computerization/automation, leading to enhancement of operating efficiency; and (c) by business process improvements such as streamlining of supplies of key inputs of steel making through higher utilisation of e-commerce, centralized procurement for select items, etc. QUALITY COMPETITIVENESS: Technology & input quality improvement across value chain; thrust on special quality steel and new products; improvement in process consistency and metal treatment; advanced online testing and quality control facilities; standardization/automation/process control & IT.

ACHIEVEMENTS SAILs record breaking financial performance in April-December of 2007-08 assumes special significance in view of the coal crisis arising out of force majeure conditions that hampered production for the major part of the last calendar year. Continuing with its record-breaking spree, SAIL put up yet another grand show in the first nine months of the current financial year, supported by superlative performance during OctoberDecember 2008. The companys profit before tax (PBT) for Q3 of 2008-09 increased by more than 250% to touch a record Rs. 2,711 crore, as against Rs. 767 crore in the corresponding quarter of the previous year. Net profit for the quarter at Rs. 1,514 crore was 105% higher than the Rs. 938 crore earned by the company for the corresponding period during the previous financial year. The factors that contributed to the company achieving a substantially improved bottomline during the first nine months of 2008-09 included higher volume of production, enhanced output through the energy-efficient continuous casting route, increase in share of value-added products, and achievement of better techno-economic factors, especially in Q3. Saleable steel production by SAIL at 2.94 MT in Q3 was 5% higher than that of the corresponding period in the previous year. The companys internal efficiency indices showed further improvement with energy consumption coming down from 7.48 to 7.35 giga calories per tonne of crude steel (Gcal/tcs) and coke rate falling from 542 to 536 kgs per tonne of hot metal (kg/thm) during April.

SALES

Page | 113

Prices remained generally stable during the year. Average sales realization also remained almost consistent on a quarter-to-quarter basis during the year. Increase in demand for steel throughout the year gave SAIL the opportunity to register all-time high sales of steel at 10.7 MT. The companys domestic sales grew 8% over the previous year to reach a level of 10.3 MT. SAIL consciously contained exports of steel at 4.6 lakh tonnes as against the 11 lakh tonnes shipped during 2005-06 in order to make more steel available in the country. The companys thrust on enhancing revenue from value-added products paid rich dividends. Production of special steels from the integrated steel plants rose to a level of 1.9 MT during 2008-09, recording a growth of 45% over the previous year. The company supplied 9.3 lakh tonnes of rails to the Indian Railways, 5% higher than the volume in 2006-07. SAILs supply to the Railways also included long rails measuring up to 65 metres in length.

FUTURE PLANS SAIL has an ambitious plan of increasing hot metal production by its integrated steel plants to around 20 MT by 2011-12. During this period the company will increase its crude steel production by approx. 7 MT, and the proportion of semis in the overall saleable mix will reduce to 4% from the current level of 16%. With an overall investment target amounting to around Rs. 35,000 crore, the company has already initiated measures to attain the milestones in a graded manner. Management Discussion and Analysis Report The Management of Steel Authority of India Limited presents its Analysis Report covering the performance and outlook of the Company.

A.

INDUSTRY STRUCTURE & DEVELOPMENTS General Economic Environment After several years of depressed market conditions, the financial year 2007-08 (FY 06) witnessed a buoyancy in the demand for iron and steel products and improvement in domestic as well as international prices. The index of industrial Production showed a growth of about 6.9% during FY 04 as compared to 5.7% during the previous year. Global demand for steel increased by 7.3% during the year and apparent domestic consumption of finished mild steel grew by 5% over the previous year.

Page | 114

Position of Steel Authority of India Ltd. (SAIL) SAIL was the 15th largest steel producer in the world during 2003 (source: IISI). SAIL continues to be the largest steel producer of finished steel in India with about 26% market share during the year 2007-08. B. OPPORTUNITIES & THREATS FOR SAIL Opportunities SAIL has four main integrated Steel Plants (ISPs) which have a combined capacity of 10.2 million tonnes of saleable steel with modernized facilities available to meet diverse customized requirements in the terms of quality, size, gr Threats During the fourth quarter of 2008-2009 custom duties on steel have been reduced from 25% to 15% and imports have also been exempted from levy of Special Additional Duty (SAD), thereby effectively reducing the customs duty by about 50%. As and when international prices go down there could be an increase in imports. Furthermore, any downward trend in international market prices may result in consequential reduction in realization in domestic market. C. RISKS AND CONCERNS Given the increasing globalization of the Indian economy, high volatility of international prices has a direct effect on domestic steel prices, particularly in respect of flat products. Also, the decline in international prices would lead to lower margins on exports.

D.

OUTLOOK The domestic per capita steel consumption in India is still quite low and much below the average international level, thus having an impact on the future prospects of Indian steel companies. However, implementation of steel intensive projects in key sectors of economy would be beneficial to the Indian Steel Industry.

E.

REVIEW OF FINANCIAL PERFORMANCE OF 2008-09 VS 2007-08

Page | 115

Annual turnover of Rs. 48681 crore a growth of 7% Annual PBT- Rs. 9403 decrease 0f 18% Annual PAT-Rs.6175 crore decrease of 18% Annual EBIDTA of Rs.10,942 crore decrease of 16% PAT/Net worth -22% Debt/Equtio ratio :0.27:1 as on 31-03-09 to against 0.13:1 as on 31-03-08 EPS of 14.45

PROFIT AFTER TAX

Financial Performance
8000 7000 6000 5000 4000 3000 2000 1000 0 2006-07 2007-08 2008-09 6202 7537 6175

PROFIT BEFORE TAX

Page | 116

financial performance
14000 12000 10000 8000 6000 4000 2000 0 2005-06 2006-07 2007-08 2008-09 5706 9423 Series1 11469 9403

BANKERS State Bank of India UCO Bank State Bank of Mysore IDBI Bank Ltd. Syndicate Bank Canara Bank Punjab and Sind Bank Ltd. Punjab National Bank Allahabad Bank United Bank of India Jammu & Kashmir Bank Syndicate Bank State Bank of Saurashtra Union Bank of India State Bank of Hyderabad Bank of India Bank of Maharashtra

Page | 117

Bank of Maharashtra Bank of India State Bank of Hyderabad Union Bank of India State Bank of Saurashtra State Bank of Patiala Central Bank of India

Page | 118