HOTHUR STEELS 1. Industry profile: India is one of hot spots for iron ore extraction and for the past three years has been the largest producer of sponge iron (SI) in the world. Sponge iron also known as direct reduced iron is extracted from iron and is used in the making of steel with the global demand for steel over the past few years the sponge iron industry has also seen a boom. To facilitate growth of the steel industry, in 1985 the government has relicensed the iron and steel industry and removed it from the list of industries reserved for the public sector. Over the years pricing and distribution of steel have also been deregulated. To support availability of adequate finance, 100percent foreign direct investment is permitted in this sector under automatic route. Custom duty on raw material has been progressively reduced to meet the RK Inst of mgt and computer science 1
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HOTHUR STEELS
1. Industry profile:
India is one of hot spots for iron ore extraction and for the past three years has
been the largest producer of sponge iron (SI) in the world. Sponge iron also
known as direct reduced iron is extracted from iron and is used in the making of
steel with the global demand for steel over the past few years the sponge iron
industry has also seen a boom.
To facilitate growth of the steel industry, in 1985 the government has
relicensed the iron and steel industry and removed it from the list of industries
reserved for the public sector. Over the years pricing and distribution of steel
have also been deregulated. To support availability of adequate finance,
100percent foreign direct investment is permitted in this sector under automatic
route. Custom duty on raw material has been progressively reduced to meet the
requirement of the industry as also to reduce the cost of production of steel.
These subsidies and de-licensing have heightened the growth of the iron industry
in India. On the hand steel giants of the world like Pasco, mittal and domestic
dominants of steel market Tata , jindal have already routed huge investments (in
crores) in sponge iron and steel industry. On the other hand, 60% of the sponge
iron units are actually small scale industries. “Some of these are unreported fly by
night companies. Hence, it is quite impossible to ascertain the total number”!
Evolution of the sponge iron industry
Though the industrial application of sponge iron started early in the 1950s, it
could not fulfill industry expectations at that time being used as a
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HOTHUR STEELSsupplementary material for feed / alternative to blast furnaces. The main
reasons were-
The gas based sponge iron plants could operate only were cheap (subsidized)
natural gas was made available.
Sponge iron furnaces could not be developed into a single entity to produce
liquid metals
Increased scrap availability that was being traded world wide As a furnace
raw material.
DEVELOPMENT OF COAL BASED SPONGE IRON PROCESSES
WITH PARTICULAR REFERENCE INDIA
A coal based sponge iron plant was first built in 1980 at a place called paloncha
in Andhra Pradesh which had a capacity of just 0.03 million tons per annum. In
a span of 20 years the industry has grown rapidly and the present estimated
capacity is nearly 4.5 million tones the industry has become well developed and
is presently operating in eight different states of India. For a direct reduction in
the inclined rotary kiln, ore and coal will normally pass through the inclined
kiln in counter current direction to the oxidizing flue gases in the freeboard.
After material heating, ore reduction and carbon gasification take place in close
association with each other. The volatile constituents of the coal and carbon
monoxide from the bed material are burnt, over the entire length of the kiln with
controlled amount of air, thereby providing the necessary heat required for the
metallization process. The rotary kiln discharge is cooled in a rotary cooler
connected to the kiln, screened and subjected to magnetic separation in order to
remove the non magnetic from the sponge iron.
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HOTHUR STEELS
The sponge iron has of late come up as a major input material for steel making
through electric furnace route –both electric Arc Furnace and Induction
Furnace. Due to long gestation period, huge investments, dependence for coke
on foreign suppliers, etc. the steel industry is slowly diverting itself from blast
furnace route to electric furnace route and the requirement of sponge Iron is
increasing very fast. Another major reason is the global shortage of scrap. The
steel making furnaces in the eastern region use average 70% Sponge Iron in the
feed material for steel making. The future for the Sponge Iron is therefore quite
bright.
ROLE OF DRI (DIRECT REDUCTION IRON) IN ECONOMY
The steel is today considered as the back bone of Indian economy. The growth
of economy has a direct relation with demand of steel. With the present steel
intensity index, considering the (GPD) projection by the government. Of India,
growth of steel demand will be around 11% annually.
India China
Year 1952 1.5 1.5
Year 2005-06 43 340
PRODUCTION OF STEEL: (figures in MT)
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HOTHUR STEELSIt is universally accepted that Indian economy is growing at very high rate
presently and demand for the steel is also showing an upward trend. Number of
units in operation – India 283 now DIR units have spread over state of Orissa,
Jharkhand, chattisgarh, west Bengal, Karnataka, tamilnadu, Andhra Pradesh
Gujarat and goa. India is largest producer of sponge iron in the world: in the
year 2006
India produced 13.9 million ton
Venezuela 6.2 million ton
Iran 4.3 million ton
Mexico 4.5 million ton
As per the national steel policy issued the ministry of the steel –India will
produce 110 million tons of steel by 2020.the requirement of sponge iron as
metallic will tons.
Projection for metallic requirement:
Year Route Melting scrap DRI
2010-11 Electric furnace
route
14 million 18 million
But availability of scrap is not likely to reach 11 million.
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HOTHUR STEELS Today India produce 13.9 million tons of sponge iron, out of which 4.2
million ton is gas based and remaining 9.7 million ton is coal based.
India has a proven reserve of 410 million ton of high grade iron ore, another
440 million ton of high grade iron ore which will be established. India has
total 9992 million ton of iron ore reserves (as per IBM report of 1995).
India has sufficient non-cocking coal through of high ash low fixed carbon
grade. Coal is used as a reducing for sponge iron making in the furnace.
The availability of scrap of required quantum is unlikely and therefore scraps
needs to be replaced more and more by DRI.
Local supply of scrap is diminishing as generation of scrap in India due to
improvement of technology is getting continuously minimized.
As per World Steel Dynamics (WSD) –the Global shortage of scrap will
reach 68 million tons in the year 2010.
That means the scrap price will go up and availability will be a problem.
Today the international price for scrap is around US$390.00.
Due to soaring price of iron ore and coke, blast furnace is being set up in the
countries were iron ore or coking coal is available.
With resources available in India –Sponge Iron –Electric Furnace Route is the
most viable option for steel making.
As per MARRAKESH Round Table –the bond rate of import duty will go
down further.
And foreign countries are likely to invade Indian market.
We must produce steel at a cheaper cost to remain competitive and control
over domestic market.
DRI besed steel making is therefore the only answer.
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HOTHUR STEELS 2 COMPANY PROFILE:
A. BACKGROUND & INCEPCTION OF THE COMPANY
The birth of Hothur steels was a long cherished dream came in the wake of
being in the iron ore mining business for over three decades. Blessed with
richest and largest deposits of best iron ore with Hothur steel’s sisters concerns,
Hothur Traders site situated at Sandur and Kariganur Mineral Mining Industries
site at Kariganur, Hothur Group established a record in export of iron ore.
Launching a sponge iron plant was an obvious choice and a stepping –stone for
setting up an integrated steel plant.
HOTHUR STEELS was incorporated in 2004. The company has set
up for production of SPONGE IRON based on Direct Reduction of Iron (DRI)
Technology. The plan was initially designed for 30,000MTPA and having
thought to enhance to double the capacity in couple of months.
Today HOTHUR STEELS stands for quality and trustworthiness.
HOTHUR STEELS is one of the struggles, adventure and achievement a human
chronicle of one determined man Mr.Darvesh Ahmed who is building a
powerful and unique business along with two sons Mr. Mohammed Asif and
Mr.Mohammed Tauseef gifted with vision and uncommon talents of officials
and workers.
The plant to accomplish the task of solid reductant based DR consists
of a Rotary Kiln which is the main process vessel, a raw material feeding
system, air fans mounted on the shell and also on the ground to supply of
oxygen required to the system, a rotary cooler to cool the Kiln discharge
material, product separation system, to separate the products from by products
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HOTHUR STEELSand waste gas handling system to treat the Kiln flew gases and to maintain
positive pressure in Kiln and cooler system.
LOCATION
The plant located 10Km away from Bellary city, the city of steel making in
survey no.288/289 Halkundi Village on Bangalore – Bellary national highway
Road. Nearest Railway station and port at Goa are 8 and 320 Km away
respectively. The plant covers an area of 20 acres and another 200 acres is
acquired for further expansion of Blast Furnace and sinter plant.
CAPACITY
HOTHUR STEELS has 100X3TPD Kilns and manufacture 90,000mt per
annum.
H.DURVESH AHAMED
Graduated from Siddaganga Institution of Technology in Mechanical
Engineering by securing distinction. Soon after education, joined business of his
father, Late Sri.H.Hussian Peera, who is the founder of MBT group of
Companies. He has vast experience in the field of Mining using the latest
Machines such as HM Front –end loaders, Hydraulic excavators, compressors
Heavy Earthmovers Machines etc. The production of Mines namely H.T,
KMMI, MBT, TM, TMC range from 1 lake per month 20 tons per annum.
After gaining vast experience in mining, diversified in the field of steel
(Sponge division) and successfully established 100 TPD plant at Halkundi
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HOTHUR STEELSVillage Bellary district in the name of HOTHUR STEELS with his
foresightedness, we hope HOTHUR STEELS will grow enrolment in
H.MOHAMMED ASIF (PARTNER) From Left
Graduated from Veerasiva Collage in the field of BBM. During the year 2003-
2004.
H.MOHAMMED TAUSEEF (PARTNER) From Right
Who has gone to Australia for his Masters degree in Business Management.
B.NATURE OF THE BUSINESS CARRIE
HOTHUR STEELS was established in September 2004 to produce high quality
sponge iron. This product was used initially in Induction furnace as a reducing
agent for reducing Carbon in the scrap.
Sponge iron is a metallic product is produced by direct reduction of iron
ore or pellets in the solid state (i.e. without the material going into the liquid
phase as is the case in the blast furnace, which is the conventional route for
converting iron ore into iron). It is also known as Direct Reduction Iron
(DIR).The final product after such direct reduction contains a large percentage
of metallic iron with revels of metallization up to 90% and the balance being
some amount of reduced iron oxide and the gangue in the ore. The Sponge Iron
has a highly porous structure when viewed under the microscope and hence this
product is called “Sponge Iron”.
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HOTHUR STEELSUSE OF SPONGE IRON
Sponge iron is a part –substitute for steel scrap in the manufacture of steel scrap
in the manufacture of steel by electric arc furnaces and induction furnaces (i.e.,
the secondary sector). Steel melting scrap is primarily required for using as a
feed material in all mini steel plants, which also use scrap for melting in electric
arc furnaces/induction furnaces for manufacturing steel. Due to acute a shortage
of scrap worldwide, sponge iron has become the only alternative feedback for
secondary steel making and hence its demand is growing day by day.
MANUFACTURING PROCESS
Iron ore and non coking coal are the prime raw material for the production of
sponge iron. These are charged into a rotary kiln in requisite proportion along
with some dolomite. Coal plays a dual role in the process by acting as a
reductant as well as a fuel for providing heat to maintain the requisite
temperature inside the kiln at 950-1050c. The reduction process in solid state.
The crucial factor in this reduction process is controlled combustion of coal and
its conversion to carbon monoxide to remove oxygen from iron ore.
The overall process requires duration of ten twelve hours inside the kiln, during
which iron ore is optimally reduced and discharged to a rotary cooler for
cooling below 120 degree Celsius before coming out into into the finished
product circuit. The process sponge iron making aims to remove oxygen from
iron ore. When that accurse, the departing oxygen causes micro pores in the ore
body making it porous. The final product, when observed under microscope,
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HOTHUR STEELSresembles a honeycomb structure looking spongy in texture, hence the name
sponge iron.
PLANT
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HOTHUR STEELS 3. VISION AND MISSION & QUALITY POLICY
VISION
To set up an integrated steel plant of international standards and offer best steel
to the global market and stand ahead among the steel manufacturers. HOTHER
STEELS are in pursuit of this goal from day one and are well on the way of
achieving pinnacle of glory. It would be their constant Endeavour as they move
ahead to improve their standers to meet customer expectation by adopting
innovative methods by keeping a constant vigil on the global market demands
MISSION
Setting out to offer quality product to the global market by exercising control
over every step of the process, investing in research & development to establish
global standards, maintaining business ethics and nurturing the talents of the
work force by providing the right ambience and amenities. Planning to establish
a co gen power project from the wasteful emission of gas, an endeavor to
maintain the ecological balance is our mission statement.
QUALITY POLICY
In a fiercely competitive iron ore trade in the world, HOTHUR STEELS strive
to stand at peak by maintaining high standards from blasting of ore, excavation,
screening and grading at site, transportation of raw material by their own means,
in-house grading, purification and sorting out the produce all set to global
standards to be the best in the business. HOTHUR STEELS iron ore and sponge
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HOTHUR STEELSiron are accepted by clients across the globe go to prove our commitment to
quality. Aspiration to be the best in the business and believing in their innate
strength to face the challenges to bring out the best, in them combined with the
urge to serve the society, offering employment to the youth of the region, and
safeguarding the environment by adopting latest technology in manufacturing,
are the valuable and cherish able qualities of the promoters of the Hothur steels.
PRODUCT/SERVICE PROFILE
PRODUCT RANGE
PRODUCT RANGE AND NOMINAL WEIGHT:
Size of Bar
(mm)
Cross - sectional Area (mm2)
Negative Section Weight
Standard Section Weight
Positive Section Weight
BMM TMT
8 50.3 0.363 0.395 0.427 0.383 – 0.407
10 78.6 .0568 0.617 0.666 0.598 – 0.636
12 113.1 0.817 0.888 0.959 0.861 – 0.915
16 201.2 1.454 1.58 1.706 1.548 – 1.612
20 314.3 2.272 2.470 2.668 2.421 – 2.519
25 491.1 3.542 3.850 4.158 3.773 – 3.927
28 616 4.444 4.830 5.216 4.782 – 4.878
32 804.6 5.805 6.310 6.815 6.247 – 6.373
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HOTHUR STEELSSponge iron is a metallic is produced by direct reduction of iron ore or pellets in
the solid state (it without the material going into the liquid phase as is the case
in the blast furnace, which is the conventional route for converting iron ore into
iron). It also knows as direct reduced iron (DRI). The final product after such
direct reduction contains a large percentage of metallic iron with levels of
metallization up to 90% and the balance being some amount of reduced iron
oxide and the gangue in the ore. The sponge iron has a highly porous structure
when viewed under the microscope and hence this product is called “sponge
iron”
The main raw material required for the proposed iron plant are:
IRON ORE, COAL, AND LIMESTONE.
IRON ORE
In sponge iron making iron ore is reduced in solid state. Unlike in the
conventional steel melting process; the gangue content of iron ore cannot be
separated as a slag. Therefore, becomes imperative to select an ore with a high
Fe content and a low gangue content to optimize yield during steel making.
Apart from this to ensure a better kiln campaign life and output, the iron ore is
made to undergo a series of other tests viz. shatter, tumbler, and abrasion
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HOTHUR STEELSindices, reducibility etc. the iron ore used in hematite with an Fe content of 62-
66% having low decrepitating characteristic. In the initial days the iron size was
kept at 5-20mm and was washed in a scrub but presently it has become a
standard norm to use 5-18mm ore as feed for a large kiln without scrubbing
and /or washing. This has resulted in reducing the cost of iron ore fed to the
kiln. The consumption of iron ore has also decreased from about 1600kg per
tons of sponge iron to 1500kg levels mainly due to better understanding of the
process, improvements of the equipment and increased level of automation.
coal
Important factors determining coal quality are:
Chemical properties such as fixed carbon, ash content, volatile matter, etc
physical properties viz. reactivity and ash fusion temperature.
Non- cooking coal is being used having certain important parameters considered
necessary for the direct reduction of iron ore viz. reactivity, ash softening
temperature, caking and swelling indices and sulpher content, etc. in India the
availability of these coals is very low due to government monopoly even though
Abundant resources of non cooking coal are available. Initially, only B grade
coals were being consumed whose availability has now become scarce. The
industry has successfully adopt measures to utilize C and G grade coals through
better process control, installing raw material heating system, shale picking
belts and coal washing plants. With these measures the coals cost has been
reduced by nearly20-30% when compared with the usage B of grade coal.
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HOTHUR STEELSDOLOMITE
Dolomite acts in process as a desulphuriser, removing sulphur from the feed
mix during the reduction process. It is mixed in small proportion along with
other raw material before charging into the kiln. Dolomite is mainly used as a
desulphurisenr agent to prevent the pickup of sulphur released by the burning of
coal inside the furnace. The initial specification for dolomite was 1-4mm, later
it was found that 4-8mm dolomite was far more suitable by which the
consumption can be reduced by 50% this was mainly due to the fact that lot of
dolomite fines were being lost to waste gases and with 4-8mm fraction this loss
was minimized.
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HOTHUR STEELSPROPORTION OF GOOD GRADE SPONGE IRON
Proportion of sponge iron
constituent percentage
A chemical
Fe, total 90-92
Fe metallic 81-84
Metallization 90
Sulphur 0.03 max
Phosphorous 0.05 max
carbon 0.10 max
Gangue content
B physical 6-8
Size lump +3 mm
fines -3 mm
Bulk density 1.6-2.0 MT/m3
Inherent density 3.5MT/m3(approx)
FEATURES OF SPONGE IRON
High iron content and high degree of metallization
Uniform and consistent quality
Lower sulphur and phosphorous content
Negligible tramp element
Minimum dust generation during material handling
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HOTHUR STEELS Good flow ability in bins, pipes, and conveyors for continuous and trouble
free charging
Superior technical support to induction furnace operators
E .AREA OF OPERATION
HOTHUR STEELS operates regionally since its head office is located at
Bellary. There is no existence of any branches.
F.OWNERSHIP PATTERN
HOTHUR STEELS is a partnership firm carried by H.Mohammed Asif and H.
Mohammed Tauseef with an initial investment of Rs.3.43 crores. The
contribution of partners to the firm is in equal ratio and it was 50 employees in
2004.
G. COMPETITORS INFORMATION
HOTHUR ISPATH
Location: velivelipuram, Bellary.
Total output: 200 tons per day
EMBITEE (MBT)
Location: veniveerapur, Hospet road, Bellary
Total output:200 tons per day
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HOTHUR STEELS JANAKI STEELS
Location: near sidiginamola Bellary
Total output:600 tons per day
BENKEKA STEELS
Location: Belegal village, Bellary.
Total output: 200 tons per day.
H.INFRUSRACTURE FACILITIES
Infrastructure facilities mean the basic requirements that the company should
look after in order to ensure free flow of activities
LAND
The land is located on the main road, it is well connection by road & it is very
near to iron ore availability. There is amble land available for the unite
including sponge of iron ore & coal further land is also available for future
expansion for power plant or induction furnace with rolling mill. The
requirement of raw material to every ton of sponge iron production is more than
3 times, meaning for every 3 tons of raw material 1 tons of sponge is produced
hence transportation cost of raw materials takes an important role. It is here that
the situation of land is very important & it should be very near to raw materials
sourcing.
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HOTHUR STEELSWATER
The underground water level is very good .tube well will be put to draw water
from the ground. The recharge of the ground water is also very good keeping in
view the hilly area of Bellary. The water is used for to bring down the
temperature of Iron ore which is heated in the kiln. The water will be recycled
every time and the loss of water is only due to evaporation.
POWER AND FULE
GESCOM will be approached and there should not be any problem in obtaining
power from the government ,However a D G set will be procured locally.LDO
will be used for initially heating , which also be procured locally .
CANTEEN FACILITIES
Canteen facilities are made available to the employees inside the premises.
TRNASPORTATION FACILITY
Transport facilities are provided to the employees.
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HOTHUR STEELSSAFETY
At the work place to avoid the accidents the workers are provided with gloves,
helmets and eyeglasses .Harmful chemicals mixed water is passed through a
canal then it is filtered more than six times. All safety measures are taken to
avoid fire and other accident.
HEALTH CARE CENTER
Health care center is maintained inside the premises so as to ensure immediate
treatment for some accidents and the employees can go for treatment if they are
ill at the working hours.
LIGHTING AND VENTILATION
Proper lighting and ventilation are provided at the work place to ensure the
smooth flow of activities.
CRISIL the rating agency has rated HOTHER STEEL as “SME-3”
HOTHER STEELS received ISO 9000-2001 certificate
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HOTHUR STEELS
Market leader in southern India, strong brand, superior quality of product.
Forward integration by expansion in steel melting shop would make used of
in-house power and result in higher value added products with better
margins
Ensuring better utilization of capital by following the principles of liquidity,
profitability and safety.
K. FUTURE GROWTH AND PROSPECTUS
Plans are afoot up a power generation unite from the waste gas produced in the
sponge iron manufacturing process, which is presently let in the atmosphere.
The co- generation integrated steel plant, rolling mills are likely to come up in
the near future. To produce best quality iron and steel product as per domestic
and international market and to achieve and practice in every field. Giving due
weight age to the development of HR available in the organization and to set
up an integrated steel plant with latest technologies, establish leadership, and
contribution to national wealth and ultimate to become one of the past
integrated steel plants in India.
To create a marketing team in Hyderabad and Bangalore and steels office in
Bangalore.
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HOTHUR STEELS3. MCKENSY`S 7S FRAME WORK WITH SPECIAL REFERENCE TO
ORGANITION UNDER STUDY.
The famous U.S consultant Me Kinsey's and the company developed holistic
approach towards the end of 1970 for diagnosing the cause of the organizational
problems and formulate the project for the improvement of the physical and
fiscal health of the company.
The 7-S model is a tool for managerial analysis and action that provides a
structure with which the whole of the organization can be considered so that the
organizational problems can be diagnosed and a strategy may be developed and
implemented. The 7-S model is a framework for analyzing the organization and
their effectiveness as a whole.
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STRUCTURE
SHARED
VALUES
SYSTEMS
STYLE
STAFF
STRATEGY
SKILLS
HOTHUR STEELS
The 7-S diagram illustrates the multiply, interconnectedness of the elements
that design an organizations ability to change. The theory helps to change the
managerial thinking about how the companies can be improved.
Framework of Mckinsey's 7 - S model
1. Shared value: The interconnecting centre of Mckinsey's model is shared
values. What does the organization stands for and what it believes in; central
beliefs and attitudes.
2. Strategy: Plans for the allocation of firm's scarce resources, over time, to