digvijay final report.docx 2
TRANSCRIPT
A
Summer Training Research Report on
Marketing Strategy of By-products &
Secondary Product at,
Bokaro Steel Plant under,SAIL
SUBMITTED TO:
Gautam Buddh Technical University, Lucknow
For the partial fulfillment of the requirement of
Master of Business Administration
(MBA-2010-12)
Under the guidance of: Under the supervision of:
Mr. Prabhat Dwevedi Mrs. Meena kamal
SUBMITTED BY
DIGVIJAY NATH
MBA FINAL YEAR
ROLL NO.-1018170027
SCIENCE AND TECHNOLOGY ENTREPRENEUR’S PARK-
HARCOURT BUTLER TECHNOLOGICAL INSTITUTE, NAWABGANJ
KANPUR-208002
PREFACE
The word “Marketing” is not new to us but there have occurred
a sea changes in its principles since the time it was first heard .
When we talk about marketing strategy of a firm, one need to
constantly waste a lot of chalks on his drawing board to outdo
their competitors. So it is a place of constant innovation & one
need to have an eagle eye on their competitors.
I student of School Of Management, STEP-HBTI,Kanpur pursuing
MBA (Mktg) course and towards the partial fulfillment of it , I
have undergone a summer project named “Study on marketing
strategy of secondary & by-product in Bokaro Steel Plant” for a
period of EIGHT(8) weeks .I used my expertise to complete the
objective accomplished in the stipulated time as study of
marketing strategy is not a cup of tea. Despite all the
limitations, obstacles, hurdles and hindrances, I came across
many difficulties to make this objective a reality. Anyhow with
the kind help and genuine interest formally supported by my
guide and college authorities.
The purpose of this project is to understand the strategy
adopted by BSL to sell their secondary & by-products. In later
part of this project we will able to understand how BSL has
2
been effectively utilizing the scraps (i.e. secondary products)
produced during the different production process & also how
constant improvement in different sections is helping BSL to
provide quality products for customers with time on delivery.
Though every effort have been made to present accurate data
& correct information, although if you find any part of the
project unacceptable, I will be highly obliged to hear your
suggestions.
3
ACKNOWLEDGEMENT
Any task is not a single person effort, same is with this project. Thus I
would like to extend my sincere thanks to all those people who helped
me in accomplishing my project .
The information’s & ideas contained in this project is the manifestation of
learning process during my Eight weeks of training period. During my training
period I came across some wonderful peoples in the form of managers, my
mentor, friends or acquaintances from whom I learned immensely. While it is
not possible to name them individually I would like to express a deep sense of
gratitude towards them.
I would also like to express my heartfelt thanks to all the officers of Bokaro
Steel Plant who really helped a lot and guided me throughout my training
session, This project would not have been possible in the absence of their help.
I like to thanks Mr. B.K Prasad (DGM,Stores), Mr. Haldhar Ojha (AGM,SSD), Mr. Prasad
(AGM,BPP), Ms. Manisha (Jr.manager, S&C) and Mr. Ashok Rai(e-Auction,metal junction)
who are directly involved in this project.
No amount of thanks can be ever repay the great debt that I own of Mr.
Gobinda burman (Jr.Manager ,Marketing), whose constant guidance &
inspiration have made this project successful.
Submitted with regards,
4
Digvijay
Nath
TABLE OF CONTENTS
CHAPTER SUBJECT PAGE NO.
1. 1.1 EXECUTIVE SUMMARY
1.2 OBJECTIVE OF STUDY
1.3 METHODOLOGY
1
10
11
2. BRIEF PROFILE OF THE UNIT UNDER
STUDY SAIL,BOKARO STEEL PLANT
2.1 INTRODUCTION OF SAIL
2.2 ABOUT METAL JUCTION
2.3 CENTRAL MARKETING ORG.
2.4 ABOUT BSL
2.5 CORE VALUE OF BSL
2.7 MAJOR UNITS OF BSL
12-30
12-14
15-`16
17-20
21-25
26
27-30
3. SECONDARY AND BY-PRODUCT IN BSL
3.1 WHAT ARE SECONDARY PRODUCTS AND BY-PRODUCT
31-39
31-36
5
3.2 NECESSITY OF SELLING THE SECONDAY PRODUCT
AND BY-PRODUCT
37-39
4. MARKETING DEPARTMENT (BSL)
4.1 OBJECTIVE
4.2 FUNCTION
4.3 MARKETING POLICY
41-51
41-42
43
44-48
5. STRATEGY
5.1 MARKETING STRAEGY OF BSL
49-55
49-55
6. MODE OF SALE
5.1 E-AUCTION, PROCEDURE OF E-AUCTION, RULE AND
REGULATION, CONDUCTION OF AUCTION AND TERMS AND
CONDITION.
5.6 SALE THROUGH FIXED PRICE
5.7 OPEN TENDER
56-68
57-62
63-65
66-68
6. DATA ANALYSIS
6.1 DATA COLLECTED FROM MARKETING AND OTHER
DEPARTMENTS OF BSL
69-75
69-75
6
7. SWOT ANALYSIS 76-77
8. FINDING 93
9. SUGGESTION & RECOMMENDATION 79-80
CONCLUSION ………………………………………………………………81
QUESTIONNAIRE…………………………………………………………100
ABBREVIATION ……………………………………………………………116
BIBLIOGRAPHY ……………………………………………………………….117
7
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.
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 Department. 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 from Marketing department of BSL.
BSL is the largest Steel manufacturing sector of India and is top
ranked in the global fortune 500 companies.
8
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 competitive 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.The basic objective behind the
study carried out by me is to study the major contribution of
Secondary product and By- product to total sales, which is pre-
determining for the success of the company. By selling the
Secondary product in local market company is earning profits.
9
It is also creating an employment in small scale industries and
developing the economy.
OBJECTIVE OF THE STUDY
In Bokaro steel plant there is various section of marketing
department. Since I have chosen "Marketing of secondary
products in B.S.L." my main objectives are:-
1. To know what is secondary product, by product and why is it
necessary to sell the secondary product.
2. To know the use of secondary product & by-product.
3. Market study of secondary product & by-product in BSL.
4. To know the pricing of secondary product & by-product.
5. Ensuring timely dispatch of material, products, scrap etc to
the potential customers.
10
6. To know the others terms and conditions for marketing of
secondary products.
METHODOLOGY USED
The methodology adopted by me during the project on
"Marketing of Secondary Product on B.S.L" can be divided into
two parts:
(A) To know about the organization.
(B) To know about the procedure and working of Marketing
Department and Secondary Section.
(A) To know about the organization. Information / data has
been
Collected from:-
(i) Government Publications.
(ii) Books of organization.
(iii) Journal.
(iv) Company's Website.
11
(B) To know about the procedure and working of Marketing
Department and Secondary Section information has been
collected by:
(a) Observation Method
(b) Personal Interview with AGM , Senior managers ,Managers.
(C) Document provided by them.
INTRODUCTION
Iron & steel are being use by men for almost 6000 years, but
the modern form of iron & steel industry came into being only
during 19th century. This industry has grown very rapidly only
after the Second World War; World production was 2.83 MT in
1900, rose to 159.6 MT by 1943 and 782.8 MT in 1989. The
total demand of steel in the world was to be 913 MT in 2007.
World’s 1st Iron works was established in 1646 in USA. In 1984
1st open Hearth Furnace was used in Europe for making steel. In
1906 1st are Furnace was used. In 1950 1st Basic Oxygen
Furnace was used. In 1960 Computer was used in steel
industry. In 1970 Continuous Casting Process was used for the
production of steel and 6% of total steel were produced through
12
this process. Now 66.6% of the world’s raw steel production is
through this process. As a result product yield increased from
81% to 95% and reduced its energy consumption by 12.5%.
Japan is producing 95.4% of its steel production through this
process, the highest in the world. Japan is the largest exporter
of steel in the world with 18 MT of finished products. Japan is
the 2nd biggest producer of steel in the world with 119.3 MT. the
1st is USSR and 3rd is USA with 82.2 MT.
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
defense 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,
galvanised sheets, electrical sheets, structurals, railway
products, plates, bars and rods, stainless steel and other alloy
steels. SAIL produces iron and steel at five integrated plants
13
and three special steel plants, located principally in the eastern
and central regions of India and situated close to domestic
sources of raw materials, including the Company's iron ore,
limestone and dolomite mines. The company has the distinction
of being India’s largest producer of iron ore and of having the
country’s second largest mines network. This gives SAIL a
competitive edge in terms of captive availability of iron ore,
limestone, and dolomite which are inputs for steel making.
SAIL's wide ranges of long and flat steel products are much in
demand in the domestic as well as the international market.
This vital responsibility is carried out by SAIL's own Central
Marketing Organisation (CMO) and the International Trade
Division. CMO encompasses a wide network of 37 branch
offices and 25 departmental Warehouses located in major cities
and towns and throughout India
With technical and managerial expertise and know-how in steel
making gained over four decades, SAIL's Consultancy Division
(SAILCON) at New Delhi offers services and consultancy to
clients world-wide.
SAIL has a well-equipped Research and Development Centre for
Iron and Steel (RDCIS) at Ranchi which helps to produce quality
14
steel and develop new technologies for the steel industry.
Besides, SAIL has its own in-house Centre for Engineering and
Technology (CET), Management Training Institute (MTI) and
Safety Organisation at Ranchi. Our captive mines are under the
control of the Raw Materials Division in Kolkata. The
Environment Management Division and Growth Division of SAIL
operate from their headquarters in Kolkata. Almost all our
plants and major units are ISO Certified.
15
ABOUT METAL JUNCTION
Corporations across the world have realized that in a world
without boundaries, certain regions and people with distinct
competencies will be more efficient than others and therefore
the visible trend in the world today is outsourcing. Companies
are outsourcing manufacturing activities, customer services,
back office operations and a host of other activities, either
because there is someone else who can do the same thing for
less, or, there is specialist who can offer services of higher
quality. Industry has recognized that whilst it has to
concentrate on growth, a prerequisite is to become globally
competitive. Industry has to, on the one hand, concentrate on
its core competencies of bringing about efficiencies in
manufacturing and on the other hand look at bringing about
efficiencies in their Supply Chain which is their buying and
selling processes. Metaljunction operates at the extreme ends
of the value chain and hence it was essential to segregate the
organization into two Major Business Units (Commercejunction
and Metaljunction) so as to independently focus on:
Specific Requirements of Clients/Customers
17
Specific procedures for both the functions
Knowledge and Information management for the two
functions
18
It is a joint venture between Tata Steel
and SAIL
CENTRAL MARKETING ORGANISATION
The ISO 9001:2000 certified Central Marketing Organization
(CMO) is India’s largest industrial marketing set up that
markets carbon steel produced by the four integrated steel
plants of SAIL. Headquartered in Kolkata, it transacts business
through its network of 34 branch sales offices spread across the
four regions, 24 Warehouses equipped with mechanized
handling systems, 11 Customer Contact Offices and 15
Consignment Agents. CMO’s domestic marketing effort is
supplemented by its ever widening network of authorized and
rural dealers who meets the demands of the smallest
customers in the remotest corners of the country. A strong IT
support system enables real time network connectivity within
the entire CMO network.
Extensive customer contact, product and segment
specialization, close monitoring of order servicing and feedback
analysis through the Customer satisfaction Index are
19
established norms at CMO. The customer friendly approach of
CMO is backed by practical after sales service.
Through the process of Key Account Management, CMO
provides single window service to key customers across the
country for every business transaction from enquiry to order
booking, order tracking to delivery, and even consultancy after-
sales service.
Central Marketing Organization (CMO) is India's largest
marketing home. It has spread its wings far and wide from
Srinagar in the North to Cochin in the South and Dhimapur in
East to Ahmedabad in the west.
All SAIL Product are marketed in India through C.M.O. to ensure
quality and prompt dispatch of product, CMO keeps in touch
with producing units as well as the transport and shipping
sectors. It operates through the network of stockyards,
dockyards, Branch sales offices, consignment agents and
Extension counter.
CMO has got responsibility to sell pig iron and mild steel
products manufacture by BSL, DSP, RSP, and BSP, having its
headquarters at Ispat Bhavan, 40 Chouringee Road, Kolkata 71.
20
CMO Branches spread through out the country with stockyards
for storing and selling Iron & Steel materials of the plants.
CMO’s International Trade Division
International Trade Division ( ITD), in New Delhi- an ISO
9001:2000 accredited unit of CMO, undertakes exports of Mild
Steel products and Pig Iron from SAIL’s five integrated steel
plants. Ever ready to meet the exacting demands of its global
customers, ITD maintains a close liaison with customers and
the production units to cater to the customized requirements of
its customers both in terms of quality and sizes.
ITD has successfully established SAIL’s brand name globally.
Among the notable destinations for SAIL products are Japan,
P.R. of China, Korea, Taiwan, Vietnam, Philippines, Singapore,
Malaysia, Thailand, Indonesia, Australia, Mexico, Europe (UK,
Germany, France, Belgium, Italy, Spain, Netherlands, Portugal),
Sudan, Oman, UAE and the neighbouring countries such as
Myanmar, Bangladesh, Sri Lanka and Nepal.
The Transport & Shipping Division of CMO headquartered at
Kolkata with its branch offices at Haldia, Paradip, Vizag and
21
Kolkata ports, ensures timely import of the key ingredient in
steel making, coking coal and handles its entire logistics. It also
caters to other plant imports and ensures efficient dispatch of
steel exports.
Headquarters
Ispat Bhavan
40, Jawaharlal Nehru Road,
Kolkata - 700 071.
Phone: (033) 2288 3810/12/14/17/18
Fax: (033) 2288 61838
E-mail: [email protected]
International
Trade Division
Hindustan Times
House
13th Floor, 18-20,
Kasturba Gandhi
Marg,
New Delhi - 110
001.
Phone: (0091-11)
2335 5733.
Fax: 0091-11-
2332 1018,2371
2774
E-mail: editd@sail-
steel.com
22
Regional Offices
Western
Region
The Metropolitan
8th & 9th floor,
Bandra-Kurla Complex,
Bandra (E), Mumbai- 400
051.
Phone: (022) 2657
1493/96/97.
Phone Fax E-Mail
FP
Group
022-
26572788/
26571836
022-
2657
1996
rmfpwr@sail-
steel.com
LP
Group
022-
26571819/
26571827
022-
2657
2042
rmlpwr@sail-
steel.com
Southern
Region
Ispat Bhavan
5 , Kodambakkam High
Road,
Chennai - 600 034.
Phone:044-2827
2091/2827 4105.
Phone Fax E-Mail
FP
Group
044-
28257164/
28274105
044-2827
1602/
28242342
rmfpsr@sail-
steel.com
LP
Group
044-
28259660
044-2827
1602
rmlpsr@sail-
steel.com
Transport and Shipping
Headquarters
Ispat Bhavan
40, Jawaharlal Nehru Road,
Kolkata - 700 071.
Phone: (033) 2288 3810/6151
Fax: (033) 2288 61808
23
INTRODUCTION
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 6thApril
1968.
The Plant is hailed as the country’s first Swadeshi steel plant,
built with maximum indigenous content in terms of equipment,
material and know-how. Its first Blast Furnace started on 2nd
October 1972 and the first phase of 1.7 MT ingot steel was
completed on 26th February 1978 with the commissioning of
the third Blast Furnace. All units of 4 MT stage have already
25
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 de-scalers, work roll bending, hydraulic
automatic gauge control, quick work roll change, laminar
cooling etc. New walking beam reheating furnaces are
replacing the less efficient pusher type furnaces. A new
hydraulic coiler has been added and two of the existing ones
revamped. With the completion of Hot Strip Mill modernization,
Bokaro is producing top quality hot rolled products that are well
accepted in the global market.
Bokaro is designed to produce flat products like Hot Rolled
Coils, Hot Rolled Plates, Hot Rolled Sheets, Cold Rolled Coils,
Cold Rolled Sheets, Tin Mill Black Plates (TMBP) and Galvanized
Plain and Corrugated (GP/GC) Sheets. Bokaro has provided a
strong raw material base for a variety of modern engineering
26
industries including automobile, pipe and tube, LPG cylinder,
barrel and drum producing industries.
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.
BRIEF GEOGRAPHICAL INFORMATION OF BOKARO STEEL
CITY
27
LOCATION Along the south bank of Damodar river on
Dhanbad-Ranchi highway at a distance of
50 km from Dhanbad and 300 km from
Kolkata.
LATITUDE 23° 29’
LONGITUDE 86° 9’
ALTITUDE 210 (meter) varying from 195m to 224m.
RAINFALL Average 157cm Maximum : 195cm
TEMPERATURE Max : 47°c Min : 12°c
CLIMATE Hot & dry, i.e. Tropical
WIND
DIRECTION
South-West to North-East
SOIL Loamy up to 1 to 2 meters and then sandy
COLOUR OF SOIL Red, yellow and light grey
HILLOCK Sarsl pahar (296m high, 5.5 km south of
Bokaro)
FOREST Bandgora (sal forest)
GRASSLAND About 3-5% of total land
28
TOTAL LAND
AREA
33,045.53 Acres
PLANT (BSL) 17,208.01 Acres
GARGA
RESERVOIR
3,886.87 Acres (Storage Capacity =17.5
million m)
RAILWAYS 1,835.94 Acres
GREEN BELT 1,011.74 Hectares
POPULATION About 3.5 lakhs
SOURCES Water - Garga river & Tenu Canal
Power-Chandrapura TPP(DVC),Bokaro TPP &
CPP
29
CORE VALUES OF BSL
30
Customer Satisfaction
Concern for
People
Consistent Profitability
Core Values
Commitment of Excellence
BOKARO STEEL PLANT—MAJOR UNIT
Brief Description:
COKE OVEN AND BY PRODUCT PLANTS:
Only shop in the country to have silos for source wise
storage.
The carbonization temperature is 10000C.
Coke oven has 8 batteries with 69 ovens each.
By-products plant produces valuable by-products like,
anthracene oil, benzene, toluene, xylene, light solvent
naptha and ammonium sulphate, extra hard pitch.
Coke Sources:
Prime coking coal: Dugda, Moonidih, Belatand
Medium coking coal: Mahuda, Rajrapa, Kedla, Kathar
Middlings for Power Plant: Dugda, Swang, Mahuda, Kedla,
ECL31
RAW MATERIAL AND MATERIAL HANDLING PLANTS:
Responsible for receipt, blending, storage, screening and
supply of raw material to blast furnace, sinter plant and
lime dolomite shop.
Shop also maintains buffer stock to take care of any
interruption in supply from mines.
Around 9MT of different raw materials are handled by four
wagon tipplers, stackers and re-claimers.
Only plant in India to have source-wise blending facilities
at RMCH.
Raw Material Sources:
Iron Ore: Kiriburu, Meghataburu, Gua, Noamundi.
Limestone: Bhawanathapur, Puranapani, Kahanabanjari,
Kuteswar, Jaisalmer.
Dolomite Limestone: Nanwara, Ametha.
Manganese Ore: Barbil, Banspani
Bauxite: Lohardaga.
BLAST FURNACE:
Five 2000 cubic meter blast furnace.
32
Furnaces are equipped with beltless top charging, double
cast houses, coal dust tar injection, cost house slag
granulation, under-burden probes.
STEEL MELTING SHOPS:
SMS-I: 5 LD converter of 120T capacity each.
SMS-II: 2 LD converters each of 300T capacity (Largest in
India).
SMS-I produces Rimming Steel also.
CONTINUOUS CASTING SHOP:
Integrated to SMS-II.
Produces mild steel of drawing, deep drawing, extra deep
drawing, boiler and tin plate quality.
Also produces low alloy steels like LPG, WTRC, SAILCOR
and API Grade.
SLABBING MILL:
COUNTRY’S ONLY Universal Mill, Hot and Cold Scraping
Machine.
2800T Shearing Machine.
Controlled heating in Soaking Pits.
33
HOT STRIP MILL (HSM):
Only continuous Hot Strip Mill in India, fully automatic.
Walking beam Reheating Furnaces, High pressure De-
scaling system, Roughing Group: Roughing Train of
Vertical scale beaker, one 2-high roughing stand, for high
universal roughing stand and edge.
Finishing Group: Flying Shear, Finishing Scale Beaker,
Seven 4-high finishing stands.
HOT ROLLED COIL FINISHING:
Hot rolled coil from HMS received here for further
distribution.
Coiled sheared and finished to customer required size and
dispatch to customer.
COLD ROLLING MILL:
Produces high quality sheet gauge materials, tin mill black
plate and galvanised products.
Capable of rolling out the widest sheet in India.
34
Products used for deep drawing purpose, automobile
bodies, furniture, drums, barrels, railway coaches, other
blending and shaping jobs and coating.
QUALITY ASSURANCE:
Entire Production flow, including allied departments,
accredited under ISO 9001:2000. Quality Management
System ISO 14001:2004. Environment Management
System implemented in all production and allied shops
SHOAS 18001:1999 Standards for occupational health and
safety implemented in all production and all allied shop.
SCRAP AND SALVAGE DEPARTMENT:
As the name signifies, the department works with Ferrous [Iron
& steel] scrap to salvage it & make it useful by adding value to
it. SSD has a dual role to play in overall scheme of things in the
works division. Primarily it has to supply Iron and Steel scrap to
Steel Melting Shop (SMS) as a technological input in the Steel
Melting process. Secondly, the role of SSD is to collect all the
Ferrous Scrap (waste for the place of origin) and bring it to the
department to transform it into a useful product. Every
35
department of the plant from Coke Oven to Cold Rolling Mill
produce mental waste termed scrap. This may be in the form of
maintenance waste e.g. broken or worn out parts, damaged
structure or equipment or may be process arising. The prime
products continue on their production flow towards the final
defined output, while the arising have to drop out as they are
not suitable chemically, Mechanically or by size and shape. In
the shape of fish tails or irregular edge trimming or produce
which are below the planned size. In a nut shell SSD’s role is to
ensure that all Iron and Steel Scrap (unwanted at place
production) are transported to site processed and transformed
to usable shape, size and quality (free of slag etc.) and
transported SMS Magnetic Scrap Yards for using as coolant in
the converter bath. Surplus scrap after supplying the
requirement of scrap is offered for external sale to generate
cash resources for the Company.
36
SECONDARY PRODUCT AND BY-PRODUCT
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.
37
Following Items fall under the category of Secondary
Products:-
(A) REROLLABLE/IRON AND STEEL SCRAP/BFG SLAG
1. MS SLAB END CUTTING WITHOUT FISH TAIL
2. HR Coil
3. CR Coil
4. AMG HR Plate
5. Cobbled Plate
6. MS THICLE PLATE CUTTING (25-40 MM) MIXED W.FR.
7. SPILLED HOT METAL (10 MT AND BELOW) SMS ARISINGS.
8. LIQUID NITROGEN.
9. FINE IRON CHIPS FROM IMP (FE-70% APP
10. LIQUID ARGON.
11. PIG TRON.
12. TURNING & BORING.
(B) OTHERS
1. CARBIDE SLUDGE.
2. U/R AMC/MCB BRICKS.
3. U/R MAJ CHROME MAJ BRICKS.
(C) COAL CHEMICALS AND BY PRODUCT
38
1. MG BENZENE
2. NG TOLUENE
3. LS NAPTHA
4. SB OIL
5. HP NAPHTHALENE
6. ANTHRANCENE OIL
7. EXTRA HARD PITCH
8. HARD MEDIUM PITCH – SOLID STATE
9. HARD MEDIUM PITCH – LIQUID STATE
A. Benzyl products (Benzene)
Place of production- Bokaro steel plant.
Mode of delivery - railway tank wagons , road tankers in
loose condition.
Uses- it is used as an important raw material for various
drugs and dyes. Benzene hexa chloride is used as a pesticide. It
is also used in the manufacturing of phenol, DDT, nylon-6 etc.
B. Toluene (Nitration grade)
Place of production- Bokaro steel plant .
39
Mode of delivery- railway tank wagons.
Uses- It is used as a solvent in many chemical reactions;
artificial
Sweetening; paint manufacturing; rubber industries;
adhesives
Making of printing ink
C. Xylene
Place of production- Bokaro steel plant .
Mode of delivery- railway tank wagons .
Uses- Paints, thinners & varnish, rubber industry and
printing ink.
D. Light solvent naptha
Place of production- Bokaro steel plant .
Mode of delivery- railway tank wagons.
Uses- as a solvent, starting material for dyes and printing
ink.
E. Still bottom oil
Place of production- Bokaro steel plant .
40
Mode of delivery- railway tank wagons/road tankers.
Uses- mixed with other materials and is used various
purposes like roof tar filling to make the roof of buildings
water-leak proof, rubber paint for vehicles, industrial oil
etc.
F. Extra hard pitch
Place of production- Bokaro steel plant .
Mode of delivery- in gunny bags in loose condition.
Uses- in aluminum industries as a binding material for
anode.
G. Soft pitch
Place of production- Bokaro steel plant .
Mode of delivery- in gunny bags in loose condition.
Uses- it is used in production of pitch fiber pipes, roof
binders, in preparation of road tar, building materials,
sheeting, tilling etc. it is also used as refractory brick.
H. Hot pressed naphthalene
Place of production- Bokaro steel plant .41
Mode of delivery- in gunny bags in loose condition.
Uses- Dye intermediate, as an insecticide, dispersing
agent.
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 are in the fix range
of up to 1.0 tones per piece.
2. BF RUNNER SCRAP
Generated in the blast furnace cast houses in the form of
runner jams etc the maximum fix per piece is up to 2 tones.
This scrap contain amount of slag.
3. UNPROCESSED STEEL
Generated in the steel melting shops in slag cups and metal
ladles.
42
4. SBIM SCRAP
This consists of semi broken ingot mould and bottom part as
scrap and is in fix range up to 2 tones 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 CUTTINGNS
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.
43
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. Scrap & Salvage department is responsible for over all
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.
NECESSITY OF SELLING THE ''SECONDARY PRODUCTS
and By-Product"
The net sales realization from all the Secondary products, By-
Products and co-products of BSL is around Rs.600 crores which
is quite more than money the big industries. Out of this Steel
Scarp arising itself brings about Rs.15200 cores of money every
year. Re-production of main products from the; secondary
44
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.4000 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 re-rolling the Secondary materials
to make finished products. It has also increased the small-scale
industries and employment opportunities.
Last year average price of scrap product were between
Rs.12000/ton to Rs.16000/ton.
Major customers
45
1. Ma Durga Ispat Udyog, Bokaro.
2. Bokaro Devlopement Area.
3. Kartike Ispat Pvt. Ltd, Kanpur.
4. Amit Steel Corporation, Howrah.
5. Diwan Steel, New Delhi.
6. Nenu Mal & sons, Kanpur.
7. Bhawani Metals, Bokaro.
8. Pandey Metals, Bokaro.
9. Chinar Steel Segment, Bokaro.
10. Mangal Pvt. Ltd., Bokaro.
11. United Iro Coporation, Dhanbad
12. Bharat Supply Company, Kolkatta
13.Anup Steels, Delhi
14. Hanuman & rise Pvt. Ltd, BIADA
15. Amit Metcum Pvt. Ltd. Etc
16. Veer kanwar singh steel Pvt. Ltd.
17. Maa tara steel
18. S M S Enterprises
19. Basuki steel Pvt. Ltd
20. Shalimar steel Udoyog
46
21. Chotanagpur ispat Pvt. Lmt
Latest Price of different By-Product which BSL were sold
in April & May 10 with previous year price
Item 2008-2009 2009-2010 2010-2011
Naphthalene Rs.47864 Rs.42793 Rs.42900
Anthracene oil Rs.13805 Rs.18511 Rs.13200
Crude Benzol Rs.38354 Rs.30961 Rs.33450
Toluene Rs.39603 Rs.39080 Rs.35300
LS Naphtha Rs.32392 Rs.31029 Rs.31050
S Boil Rs.20533 Rs.19588 Rs.1800047
Latest Price of different Secondary Product which BSL
were sold in April & May 10 with previous year price per
MT
Item 2008-2009 2009-2010 2010-2011
HR COIL 27000 29250 32450
CR COIL 31850 30800 33900
AMG HR
PLATE
25850 25300 29850
COBBLED
PLATE
28050 30400 28500
“ROLE OF MARKETING DEPARTMENT”
48
OBJECTIVE OF MARKETING DEPARTMENT
OF
BOKARO STEEL PLANT
Marketing Department is one of the Departments under
Materials Management Division of Bokaro Steel Plant. Marketing
Department is entrusted with the responsibilities to sell BSL’s
Secondary Products, By-Products/Waste Products, and Idle
Assets etc.
The Marketing Departments sales procedures are covered by
the guidelines given by SAIL Corporate office DELHI, and is
given by CMMG (CORPORATE MATERIAL MANAGEMENT GROUP),
the objective of which is “To sell the materials in a fair and
transparent manner to achieve maximum possible revenue to
the company”
49
(a) Marketing of prime products of SAIL’s plant including BSL
is done by CMO (Central Marketing Organisation) which is a
unit of SAIL.
(b) Marketing of secondary products and coal chemicals are
done directly by Marketing Department of BSL. As a matter
of fact, the Secondary & By-Products are marketed by the
individual Plants only.
Marketing of these products are conducted by various sections
by marketing department of Bokaro Steel plants. BSL is
engaged, with marketing of Primary Products for home sale or
export through CMO. The 4.0 Million tones section known as
plate mill section dealing with plates. Now this section has got
ISO - 9002 certificate.
50
ORGANISTATION CHART OF MARKETING DEPARTMENT
(BSL)
FUNCTION OF MARKETING DEPARTMENT
51
DGM (Mktg.)
Audit, Vigilance, RTI, & other queries reply, Contract Cell(MM), Sec. Sales
AGM(Mktg.)
Sec. Steel Ad & Est, QC, ISO, DCA, Contract Cell(MM)
Sr. Mgr.(Mktg.)
Slag, Waste, Iron, Smug. Scheme
Sr. Mgr. (Mktg.)
Idle Assets, U&S, Surplus
Sr. Mgr. (Mktg.)
Coal& Chem., Zinc Dross, Ammonium Sulphate & Ferrous Sulphate
Manager (Mktg.)
Reports, Price Monitoring, MIS
Jr. Mgr. (Mktg.)
Secondary Steel, Safety Officer
Jr. Mgr. (Mktg.)
1. To monitor the orders issued by CMO, So that these orders
can fulfilled.
2. Put pressure on CMO, to get orders for an underutilized mill.
3. To sell all the secondary products directly i.e. directly by
BSL and by CMO.
4. On day to day basis it takes care of the dispatches i.e. daily
dispatch are checked.
POLICIES OF MARKETING
Marketing Planning has responsible function in the working of
marketing department. All the risky developments, taking out
52
solution to cripple `situations, this section carries out product
pricing and related activities, some of the programmes, policies
and procedures are as follows:-
I) Positioning the product a value based place in customer
mind.
II) Finalize annual sales plan and quantity, monthly, weekly,
and daily rolling programme of Rolling mills in consultation
with CMO and mills. This plan is based on the sales forecast
receive from JPU SPL/ Iron and steel controller.
III) Optimizing the product-mix by proper utilization of available
stocks.
IV) Receiving Enquiries and complaints, cancellation of orders
etc.
V) Coordinating the works of mills and traffic department so as
to maximize dispatches.
VI) Co-ordinations with CMO from stages of enquiry, for
exports, development of new Profiles, sections, modification
of product scheduling till the orders are completed.
VII) Development of new qualities of steel.
VIII) Periodical market surveys of products to analyze the
market position.
53
IX) Implementation of suggestions received from the
customers feedback.
X) Ensure customer satisfaction by meeting customers
regularly; provide redress to their problems and fulfillment
of demand.
Pricing policy and Sales Procedure:
PRICING:
Fixing the price of a product is the most vital function in the
whole process of the marketing and it should be done after
proper market study and requires decision making ability. If
price is too low the company will lose revenue and if the price is
too high it will lose customers resulting in loss of revenue
valuable customers. Coal chemicals are the main product which
is to be marketed by the Marketing Department of Bokaro Steel
Plant. Almost all the products are sold on the reserve price and
fixed price basis. This is due to the fact that the company does
not enjoy monopoly in the said market and the price is totally
market driven.
54
The average of the prices offered by the bidder during auction
is taken as the basis to fix the prices of materials to be sold
through marketing department. Further the techniques of
break-up-pricing are adopted i.e. the larger the quantity
purchased lower will be the prices. This technique encourages
the buyers to purchase larger quantity. Finally the managing
director approves the prices set by the pricing committee. On
this basis, a price list is prepared for all the potential buyers.
Price list also indicates the sales tax and Excise duty to be
levied. Thus the interested parties place their orders with the
marketing department on the basis of price list reviewed every
month. Every customer is required to have a security deposit
amount of Rs.1 lakh. The payment for the material required is
to be in advance. The material is supposed to be lifted on the
specified date on account of delay the party has to pay the
difference in the prices, if there is any increase in subsequent
month.
Standing Pricing Committee:
The committee reviews the price of various products and takes
decision in favor of maximizing the revenue. It holds meeting at
least once in a month. But the volatility of the market and pool
55
of different products lead to a number of meeting of the
committee in quick succession.
The committee consists of:
GM (Utility), Chairman
GM (Marketing), Convener
DGM (Finance), member
DGM (Sales Coordination), member
DGM (Stores), member
DGM (BPP), member
For Scrap goods the DGM (SSD) replaces the DGM (BPP). Rests
of all the members are always present in all the meetings.
56
While deciding the price following points are kept in
mind:
Dispatch of the last month.
Material in stock.
Forecast of next month.
General market condition.
Availability of transport facility.
GM (Marketing), as per the need, decides the frequency and
time of meetings to be held. Minute report of all the meetings is
prepared and it contains the existing price and the proposed
price. The final price is moved to the MD through the official
channel including GM (Marketing), Executive Director (MM), GM
(Finance and Accounts), and ED (Works). After the MD’s
approval the price becomes applicable and the circular
indicating the revised price is printed, issued and distribution to
the customers and all the concerned departments.
57
SALES PROMOTION
Sales Promotion consists of a diverse collection of incentive
tools designed to stimulate quicker or greater purchase of
particular product. As a part of promotional activities, BSL is
employing following activities:
a)Discount slabs is provided to boost the sales, description
of which is given below:
Up to 10,000 tones ----- No Discount
10,000 to 15,000 ----- 15% Discount
Above 15,000 ----- 20% Discount
b)To find new customers and to inform customers at far
distant areas Tender Notice given in the newspaper for
sale of scraps. Best among the application is accepted
with a view to get the best revenue.
c) Sometimes when new item is to be sold sales notice is
given in the newspaper. But most of the time local
customers get informed from other customers.
58
MARKETING STRATEGIES OF BSL
Steel being an industrial commodity it is very necessary to
maintain customer relationship for revenue earning and
smooth running of company.
1. Customer Satisfaction
BSL adopts following practices for customer satisfaction.
a. Procedure / process adapted to access current / future
expectation of customers.
b. It induces market research visiting customer premises
attending to customer complaints.
c. CMO has Market Management Group where specialists
monitor changing demand pattern and development in each
Market segment is carried on.
d. It has posted market development officers at various
locations that are its eyes and ears for monitoring current and
future expectation of its customer.
e. The Business-planning department is exclusively meant to
study customer's changing demand scenario and assess
current and future expectation.59
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.
2. STOCK REDUCTION
60
Giving facilities like door delivery, road dispatches, credits
facility and rounds the clock stockyard operation.
4 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.
5 DOCUMENTATION
With the dispatch of product the Finance department calculates
the total cost of product as per demand order. Certain receipts
and bills quoting the material code, nature, quantity, and all
expenses are sent to connected stockyard. The product will be
then released to the concerned person after proper and
complete payment to the pay-in- authorities is made.
MARKETING OF SECONDARY PRODUCTS
During the sixties and seventies when the plant was one
million-tones and2.5 million-tonnes capacity respectively,
arising of secondary products was limited and such arising was
61
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 2.5 million tons to 4 million
tones 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 generating
revenue. There by the plant also has geared up its strategy
towards this end. One of the strategies adopted by the plant for
increasing the 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 small-scale units.
This, in turn gives scope for more employment opportunities.
62
The plant for marketing has adopted following strategy:
1. Committed delivery.
2. Competitive price
3. Quick complaint settlement.
4. Culture of customer service.
It is necessary to mentioned here that the companies' profit
consists of 10% turnover of secondary products for the Last two
years.
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 finalizes the plan for actual quantity
of scrap to be sold in consultation with MRD. Marketing 63
department finalizes mode of sale, terms and conditions for
sale, locations and commercial aspects.
3. The pricing committee consist of Managing Directors fixes
the price of each type of scrap.
4. Marketing department obtains MD's approval on price fixed
by pricing committee.
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.
64
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, slag and waste
products.
65
8. Based on the deposit made by the party, finance
department intimates to marketing department about release
of requisite scrap for supply.
THE STRUCTURE OF THE PROCESS OF SALES AND MARKETING
66
67
PRODUCTS
PRIMARY (SPECIFIC PARAMETER) SECONDARY/BY-PRODUCTS
CMO (KOLKATA) UNITS- BSL, BSS, RSP, DSP etc
BSL MARKETING
METHOD OF SELLING
E-AUCTION SALE TENDER FIXED PRICE SALE
BSL MARKETING (MAIN SECTION)
STEEL CHEMICAL & BYE-PRODUCTS
SLAGS & WASTE PRODUCTS
IDLE ASSETS PRICING
MODE OF SALE OF SECONDARY AND BY-PRODUCT
Selling of Secondary & By-Product
This involves a direct marketing process. The management of
BSL in consultation with the official of the market development
and customer service department work as group for the sale of
these items. Different modes of selling are used for these
products
MODE OF SALE
68
E-auction Fixed Price Sale
Inter Plant Transfer
Tender
E-AUCTIONProcedure of E-Auction
Advertisement/posting of dates and types of materials to be
auctioned in SAIL website and various news papers (Local &
National) every 15th to 20th of the month for the next month,
1. Posting of details of lots to be auctioned one week prior to
the date of auction, on the website of SAIL and metal
Junction.com.
2. 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.
6. Approval for sale of lots recommended by RP opening
committee.
7. Issue of offer to the customers, based on approval of chief
Executives.
In this method the defective materials from all the mills is
arranged in heaps of 100-150 tones to be sold by auction.
69
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 has increased the re-rolling mill to
develop very fast. The plant extends all types of facilities and
assistance to these small scale units, which to turn give scope
for more employment, and then the material is lifted on the
terms and conditions as mentioned in the tenders.
70
FLOW CHART OF E-AUCTION
71
Advertisement of dates/type of materials
on SAIL
Posting of lot details to be auctioned on SAIL / Metal
Junction website
Auction conducted on Metal junction.com
Inspection of lots by customers
Report of Auction by metaljunction.com
Reserve Price Opening Committee meeting
Recommendations Approval for Sale
Issue of Offer Letter
DEFINITION OF KEY TERMS
Auction.
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.
72
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.
73
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 endeavor 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
(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. The purpose is
also to familiarize participants with the functionality and
screens of the auction mechanism. It is not mandatory for
"Service Provider" to provide Preview Time.
Start Time.
74
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:
Shortening 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
75
(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 signaling an end to the price discovery process.
76
FIXED PRICE SALE
PROCEDURE OF SALE THROUGH FIXED
PRICE
General Sale notice for different items to be sold is posted
on SAIL website and advertise in various newspapers
(Local and National) between every 15th to 20th of the
month for the next month,
For requisition of materials, applications are invited from
customers bet 25th -30th/31st of every month.
Allocation of material to various customers is done as per
approved procedure of priority allocation.
Offer letters are issued to the customers.
Price applicable will be the price rising at the time of
dispatch.
77
FLOW CHART OF FIXED PRICE
78
Advertisement of type of materials on SAIL
website/Newspaper
Application from customers
Issue of offer letter
Allocation of material
PRIORITY IN BOOKING OF MATERIALS BY MARKETING
DEPTT
Catego
ry
Priori
ty
Buyer Quantity to be
allotted
A 1st Govt. Units/PSUs & its
subsidiaries & joint
ventures of govt. units
having more than 50%
govt. share
Any quantity
required by
them
B 2nd Dependent BIADA units
with MD/BIADA’S
recommendations &
MD/BSL’s approval.
Maximum 70%
of the balance
available
quantity after
meeting the
79
1st priority
C 3rd Consumers/Processes of
Jharkhand state
30% of
balance
D 4th To all other customers Out of the
balance
quantity of
material left if
any
80
TENDER
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 , if so
desired, before submitting the quotations.
Parties will be permitted to see the materials from 9.30 Hrs to
4.30 Hrs daily on working days. Necessary entry passes may
be obtained from the Receptionist/ CISF
81
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 MONEY
EMD (Earnest Money Deposit) Rs.100000/- for the item to be
deposited in the form of DD/BC/PAY ORDER in favors of
SAIL/Bokaro Steel Plant, payable at Bokaro, from any
Nationalized / 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 DEPARTMENT . 82
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. 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), 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 at Bokaro from
any of the Nationalized / Scheduled banks in favor of SAIL
/Bokaro Steel Plant. In case of failure of payment as mentioned
83
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.
84
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.
DATA COLLECTED
SALES OF SECONDARY STEEL (Value in Lacks)
85
1 2 3 40
5000
10000
15000
20000
25000
Series1Series2
PERIOD 2009-
10
2010-11
1st Qtr 15464 17022
2nd Qtr 17179 20564
3rd Qtr 17425 15602
4th Qtr 19194 13159
SALES OF IRON & SCRAP (Value in Lacks)
86
1 2 3 40
200
400
600
800
1000
1200
1400
1600
1800
2000
Series1Series2
SALES BFG SLAG
(Value in Lacks)87
PERIO
D
2009-
10
2010-11
1st Qtr 1358 1726
2nd Qtr 1515 1439
3rd Qtr 1414 1503
4th Qtr 1872 1315
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr1050
1100
1150
1200
1250
1300
1350
1400
1450
Series1Series2
88
PERIO
D
2009-
10
2010-
2011
1st Qtr 1197 1240
2nd
Qtr
1333 1314
3rd
Qtr
1353 1282
4th
Qtr
1340 1398
SALES BY-PRODUCTS (Value in Lacks)
2005-0610%
2006-0713%
2007-0811%
2008-0914%
2009-1019%
2010-1132%
Chart Title
PERIOD 2005-
06
2006-
07
2007-
08
2008-
09
2009-
10
2010-11
1ST Qtr 904 1218 1041 1263 1759 2906
2ND Qtr 1320 1731 1417 1458 2047 2797
3RD Qtr 1145 1038 1312 1295 2104 2041
4TH Qtr 2024 1797 2045 2115 1918 1701
TOTAL 5393 5784 5815 6131 7828 9445
89
SALES MISC OTHERS (Value in Lacks)
1 2 30
200
400
600
800
1000
1200
1400
1600
2009-102010-11
PERIOD 2009-10 2010-11
1st Qtr 961 1457
2nd Qtr 848 1515
3rd Qtr 987 1065
4th Qtr 1182 462
90
E-AUCTION (Value in Lakhs)
1 2 3 40
2000
4000
6000
8000
10000
12000
14000
16000
2009-102010-11
PERIO
D
2009-
10
2010-09
1st
Qtr
8144 13410
2nd
Qtr
12100 10800
3rd
Qtr
9146 11223
4th 12619 6553
91
Qtr
PRODUCTION PERFORMANCE OF BSL
09-10 10-11(MARCH)
TARGET ACTUAL TARGET ACTUAL
HOT METAL 4585 4660 5050 4020
CRUDE
STEEL
4360 4130 4700 3577
SALEABLE
CR-COIL
3655 3600 4210 6479
SALAEBLE
STEEL
3780 3900 4110 3383
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SWOT ANALYSIS
STRENGTH-:
1. Bokaro Steel Plant has a huge pool of skilled and
experienced personnel.
2. Principle of hierarchy is given due respect in BSP enabling
management to ensure proper planning and its
implementation.
3. Flawless corporate image of SAIL enhances the confidence
of managers and customers alike.
4. Record of harmonious customer relation boosts the
revenue graph towards north.
5. Strategic Information System in the organization gives
cutting edge advantage reducing cost and time for every
operation.
6. Huge infrastructure, when provides a strong base for
better production and marketing, since it has countrywide
network of stockyards, dockyard and sales branch offices.94
7. The by-product of Bokaro Steel Plant is coal-based and of
best quality against the petroleum based bye-products,
giving the company a huge advantage against their
competitors.
8. Bokaro Steel Plant has TQP i.e. Total Quality People which
mean a dedicated work force towards serving the
company’s customers.
9. A strong R&D cell of the company keeps on working over
enriching the quality of its bye-products and to reduce the
cost of the whole process.
WEAKNESS:-
1. Lack of teamwork and internal customer orientation
inhibits proper implementation of company’s policy.
2. Complex pre post sale activities repel the probable
customers.
3. Due to its large organizational structure involving
numerous policies and officials, prompt decision making
is a real problem.
95
4. The hard working marketing officials are not given due
recognition and appropriate reward that hurts their
motivation and interest.
OPPORTUNITY:-
1. There is growing demand for secondary and by-products
in both domestic and international market.
2. State government is planning to establish small industries
in and around Bokaro which will increase the list of
probable customers.
3. New markets are to be searched and developed with the
opening of the global steel market.
4. There is a great opportunity in the field of research to
improve the quality of the coal-based products which would
strengthen its well established base among customers.
96
FINDINGS
RELATED TO MARKETING DEPARTMENT
During our 6 weeks of training in marketing department of BSL. We have observed certain
problems in it these problems are findings of our studies.
1. All marketing procedure of prime products are decided by SAIL and carried out by the
Central Marketing Organization (CMO).
2. As the organization is concerned with a large number of productions activities and the
departmental work are done mostly manually from placement of orders to documentation,
which ultimately frustrates the employees.
3. The organization is more concerned with larger orders of steel products by ignoring the
smaller orders.
4. The local customers with business of by-products are sometimes made to wait for days to
get their papers cleared by the department.
5. Most of the existing yards suffers from improper stocking space and siding facility often
they are not well developed due to this the material stored there are rusted and other defects
97
are caused and later they are disposed of by offering some concession or at low rate which
result in loss
SUGGESTIONS & RECOMMENDATIONS:
1. Concept of Key Account Manager should be adopted for better customer satisfaction of
regular customers.
2. Extensive customer contact.
3. 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.
4. 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.
5. 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 center specifying
the size of the mill.
98
6. 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.
7. 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.
8. The infrastructure facilities at the disposal yard should be maintained properly and
needs improvements so that the pace of the lifting process is increased.
9. Fully equipped computers system in marketing department.
10. Proper packing is to be done to safeguard the materials from damage, which is
occurring due to multistage handling and transportation.
11. Refund of excess payment process should be improved and simplified. It. should make
payment in less time. Ensure delivery of the material for which the payment is accepted
so that mills are not closed or shut down for want of material.
12. 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.
99
CONCLUSION
BSL marketing network is spread all over India, which helps in collecting, orders of various customers
easily and it can easily interact with its customers.
1. BSL officers posted outside like Kolkata, Delhi, Chennai and Mumbai who work in close
coordination with the Marketing Department.
2. Sales of Secondary Product have reduced compare to previous year.
3. Sales of Iron & Scrap are also reduced compare to previous year.
4. Sales of Blast Furnace Slag are almost same as last year.
5. Sales of Pig Iron are less in this financial year. Last year sales of Pig Iron was nil in the 3 rd
and 4th qtr but in this year its has shown good market which is good sign.
6. Market of By-Product shown good sign in this financial year and sales of By-Product has
increased compare to previous year. The price of By-Product has reduced in this financial
year.
7. BSL has fail to achieve the target which they set for them and unable to meet production of
Hot Metal, Crude Steel, Saleable CR coils and Saleable Steel of the target, its result has seen
on the profit of the company which reduced by 50% compare to last financial year.
100
ANALYSIS OF DATA COLLECTED FROM THE CUSTOMER OF BSL
Question 1:- In which category of customer do you belong?
(a) Trader (b) Manufacturer (c) Processor (d) Others
Table no : -5.1
SALES
Trader 45
Manufacturer 30
Processor 20
Others 05
101
45%
30%
20% 5%
Sales
TraderManufacturerProcessorOthers
Question 2:- Why do you prefer to purchase from BSL?
(a) Quality (b) Cheap Transportation (c) Local Market (d) Low price
Table no: - 5.2
Quality 40
Cheap Transportation 20
Local Market 33
Low price 07
102
Interpretation:- From the above data it show that Trader (45%), Manufacturer (30%), Processor (20%) and others (5%) are involved in trading category with BSL.
Thus, we can say that 45% are involved in trading category with BSL.
40%
20%
33%
7%
Purchasing
QualityCheap TransportationLoacl MarketLow Price
Question 3: - Are you satisfied with the quality of the product?
(a) Yes (b) No
Table no : - 5.3
Yes 78
No 22
103
Interpretation:- From the above data 40% customer are prefer to purchase quality based product from BSL, 33 % are prefer to purchase product because of local market, 20% are prefer product for cheap transportation cost ,7 % are prefer low price of the product.
Thus, we can say that 40% of the total customer prefer to buy the qulity based product from BSL,
78%
22%
Satisfied
YesNo
Question 4: - Are you dealing with any other steel company?
(a) TATA (b) RINL (c) Essar Steel (e) Jindal Steel (d) Others
Table : - 5.4
TATA 50
RINL 10
Essar Steel 12
104
Interpretation: - From the above data 78 % are satisfied with the quality of the product of the BSL, 22 % are not satisfied with the quality of the product.
Thus, we can say that the 78% of the customer were satisfied with of the product of the BSL.
Jindal Steel 15
Others 13
50%
10%
12%
15%
13%
Dealing
TataRINLEssar SteelJindal SteelOthers
Question 5: - What type of product do you purchase from BSL?
(a) Secondary Product (b) By- Product (c) Slag (d) Idle assets
Table no :- 5.5
Secondary Product 55
By-Product 28
105
Interpretation: - From the above data Customers are dealing with some company also like 50% dealing with TATA, 10% with RINL, 12 % with Essar Steel, 15% with Jindal Steel, 13% with others company.
Thus, we can say that 50% of the customer were dealing with the TATA.
Slag 10
Idle assets 07
57%28%
10%
5%
Purchased Product
Secondary ProductBy-ProductSlagIdle assets
Question 6: - Your Company deal with
(a)Customer (b) Wholesaler (c) Other company (d) All of the them
Table no :- 5.6
Customer 30
Wholesaler 50
106
Interpretation: - From the above data 55 % customers prefer to purchase Secondary product from BSL, 28 % are on By- Product, 10 % on Slag, 7 % on the idle assets.
Thus , we can say that the most of the customer prefer to purchase Seconary product from BSL.
Other Company 13
All of them 07
30%
50%
13%
7%
Deal
CustomerWholesalerOther CompanyAll of them
Question 7: - Considering your experience with BSL, how would you rate the overall quality
of the product provided by the selected company?
(a) Excellent (b) Very Good (c) Good (d) Fair (e) Poor
Table no: - 5.7
107
Interpretation: - From the above data Company 50 % deal with there wholesaler, 30 % dealing with there customer, 12 % on other company, rest 7 % dealing with all of them.
Thus, we can say that 50% of them deal with there wholesaler .
Excellent 19
Very Good 18
Good 25
Fair 30
Poor 08
19%
18%
25%
30%
8%
Experience
ExcellentVery GoodGoodFairPoor
Question 8:- Considering the overall quality of product in relation to its price, how would
you rate the value offered?
(a) Good (b) Bad
Table no: - 5.8
Good 60
Bad 40
108
Interpretation: - From the above data As compare to BSL other company 30 % provides fair quality of the product, 25 % provide good quality product, 19 % provide excellent quality, 18% provide very good quality of the product, 08 % provide poor quality of the product as compare to the BSL.Thus, we can say that the BSL provide the fair products to the customer.
60%
40%
Rate
GoodBad
Question 9: - Are you satisfied with your association with BSL?
(a) satisfied (b) Dissatisfied
Table no: - 5.9
Satisfied 72
Dissatisfied 28
109
Interpretation :- From the above data It’s quality as compare to the price of the product was Good according to 60% customer ,& 40% of them says bad as compare to BSL.
Thus, we can say that the more than the average customer were satisfied.
72%
28%
SatisfiedDissatisfied
Question 10: - For what purpose do you use the By-product purchased from BSL?
(a) Trading (c) consumption
Table no:- 5.10
Trading 70
Consumption 30
110
Interpretation: - From the above data 72% customer says satisfied to the association with the BSL and 28 % are dissatisfied with the BSL with there association with the BSL.
Thus, we can say that the customer were satisfied with association with BSL.
70%
30%
Purpose
TradingConsumption
Question 11: - Which mode of sale you/your company prefer from BSL?
(a) Fixed price (b) E-auction (c) Open tender
Table no: -5.11
Fixed price 77
E-auction 13
Open tender 10
111
Interpretation: - From the above data 70% customer uses By-product for trading purpose and 30% using for consumption purpose.
Thus, we can say that the customer uses By- product for trading.
77%
13%10%
Sales
Fixed priceE-auctionOpen tender
Question 12:- Which type of mode of transport are you using?
(a) Railways (b) Road
Table no :- 5.12
Railways 15
112
Interpretation: - From the above data 77 % customers say they prefer fixed price mode of sale, 13 % says they prefer E-auction process and 10% they prefer open tender process.
Thus, we can say that 77% customer prefer fixed price mode of sale.
Road 85
15%
85%
Mode of Transport
RailwaysRoad
ANNEXURE
QUESTIONNAIRE
1. Name (Optional) : ----------------------- 3. Age : --------- 5. Address : ---------------------------2. Company Name : ----------------------- 4. Phone No : --------------------
113
Interpretation: - From the above data 85% customers they using road for transportation and 15% they are railways for transportation purpose.
Thus, we can say that the 85% of customer uses the road for transportation.
Question 1:- In which category of customer do you belong?
(a) Trader (b) Manufacturer (c) Processor (d)Others
Question 2:- Why do you prefer to purchase from BSL?
(a)Quality (b) Cheap Transportation (c) Local Market (d) Low price
Question 3: - Are you satisfied with the quality of the product?
(a) Yes (b) No
Question 4: - Are you dealing with any other steel company?
(a) TATA (b) RINL (c) Essar Steel (e) Jindal Steel (d) Others
Question 5: - What type of product do you purchase from BSL?
(a) Secondary Product (b) By- Product (c) Slag (d) Idle assets
Question 6: - Your Company deal with
(a)Customer (b) Wholesaler (c) Other company (d) All of the them
Question 7: - Considering your experience with BSL, how would you rate the overall quality of the product provided by the selected company?
(a)Excellent (b) Very Good (c) Good (d) Fair (e) Poor
Question 8:- Considering the overall quality of product in relation to its price, how would you rate the value offered?
(a) Good (b) Bad
Question 9: - Are you satisfied with your association with BSL?
(a) Satisfied (b) Dissatisfied
Question 10: - For what purpose do you use the By-product purchased from BSL?
(a)Trading (b) consumption
114
Question 11: - Which mode of sale you/your company prefer from BSL?
(a)Fixed price (b) E-auction (c) Open tender
Question 12:- Which type of mode of transport are you using?
(a)Railways (b) Road
115
ABBREVIATION
1. SAIL - Steel Authority of India Limited.
2. TISCO - TATA Iron and Steel Company.
3. MECON - Methodological & Engineering consultant’s
ltd.
4. HSCL - Hindustan steel works consultants Ltd.
5. NMDC - National Mining Development Corporation ltd.
6. RDCIS - Research and Development Centre for Iron
and Steel.
7. CET - Centre of Engineering and Technology.
8. CPTI - Central Power Training Institute.
9. MRD - Marketing Recovery Department.
10.BFGS - Blast Furnace Granulated Slag.
116
BIBIOLOGRAPHY
BOOKS
Marketing Management Philip Kotler
Marketing Management Willian Stanton
Websites
www.worldsteel.com
www.mysteel.com
www.tisco.com
www.steel.nic.in
www.ispatind.com
www.indiansteelalliance.com
Other Sources
Report given by the companies
Global steel industry news, statistics and information
portal
Research paper
117