Chapter 1. Indian steel industry 1.1 Introduction Steel Industry in India is on an upswing because of the strong global and domestic demand. India's rapid economic growth and soaring demand by sectors like infrastructure, real estate and automobiles, at home and abroad, has put Indian steel industry on the global map. According to the latest report by International Iron and Steel Institute (IISI), India is the seventh largest steel producer in the world. The origin of the modern Indian steel industry can be traced back to 1953 when a contract for the construction of an integrated steelworks in Rourkela, Orissa was signed between the Indian government and the German companies Fried Krupp und Demag AG. The initial plan was an annual capacity of 500,000 tonnes, but this was subsequently raised to 1 million tonnes. The capacity of Rourkela Steel Plant (RSP), which belongs to the SAIL (Steel Authority of India Ltd.) group, is presently about 2 million tonnes. At a very early 1
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Chapter 1. Indian steel industry
1.1 Introduction
Steel Industry in India is on an upswing because of the strong global and
domestic demand. India's rapid economic growth and soaring demand by sectors
like infrastructure, real estate and automobiles, at home and abroad, has put
Indian steel industry on the global map. According to the latest report by
International Iron and Steel Institute (IISI), India is the seventh largest steel
producer in the world.
The origin of the modern Indian steel industry can be traced back to 1953 when a
contract for the construction of an integrated steelworks in Rourkela, Orissa was
signed between the Indian government and the German companies Fried Krupp
und Demag AG. The initial plan was an annual capacity of 500,000 tonnes, but
this was subsequently raised to 1 million tonnes. The capacity of Rourkela Steel
Plant (RSP), which belongs to the SAIL (Steel Authority of India Ltd.) group, is
presently about 2 million tonnes. At a very early stage the former USSR and a
British consortium also showed an interest in establishing a modern steel
industry in India. This resulted in the Soviet-aided building of a steel mill with a
capacity of 1 million tonnes in Bhilai and the British-backed construction in
Durgapur of a foundry which also has a million tonne capacity.
The Indian steel industry is organized in three categories i.e., main producers,
other major producers and the secondary producers. The main producers and
other major producers have integrated steel making facility with plant capacities
over 0.5 mt and utilize iron ore and coal/gas for production of steel. The main
producers are Tata Steel, SAIL, and RINL, while the other major producers are
1
ESSAR, ISPAT and JVSL. The secondary sector is dispersed and consists of: (1)
Backward linkage from about 120 sponge iron producers that use iron ore and
non-coking coal, providing feedstock for steel producers; (2) Approximately 650
mini blast furnaces, electric arc furnaces, induction furnaces and energy
optimizing furnaces that use iron ore, sponge iron and melting scrap to produce
steel; and (3) Forward linkage with about 1,200 re-rollers that roll out semis into
finished steel products for consumer use.
1.2 Strengths of Indian Steel Industry:
Low labour wage rates
Abundance of quality manpower
Mature production base
Positive stimuli from construction industry
Booming automobile industry
1.3 Structural Weaknesses of Indian Steel Industry:
1. Although India has modernized its steelmaking considerably, however, nearly
6% of its crude steel is still produced using the outdated open-hearth process.
2. Labour productivity in India is still very low. According to an estimate crude
steel output at the biggest Indian steelmaker is roughly 144 tones per worker per
year, whereas in Western Europe the figure is around 600 tones.
3. India has to do a lot of catching in the production of stainless steel, which is
primarily required by the plant and equipment, pharmaceutical and chemical
industries.
4. Steel production in India is also hampered by power shortages.
2
5. India is deficient in raw materials required by the steel industry. Iron ore
deposits are finite and there are problems in mining sufficient amounts of it.
India's hard coal deposits are of low quality.
6. Insufficient freight capacity and transport infrastructure impediments to hamper the growth of Indian steel industry.
3
TATA COMPANY’S PROFILE
2.1 Introduction
The TATA Group comprises 98 operating companies in seven business sectors:
information systems and communications; engineering; materials; services;
energy; consumer products; and chemicals. The Group was founded by
Jamshedji Tata in the mid 19th century, a period when India had just set out on
the road to gaining independence from British rule. Consequently, Jamshedji
TATA and those who followed him aligned business opportunities with the
objective of nation building. This approach remains enshrined in the Group's
ethos to this day.
The TATA Group is one of India's largest and most respected business
conglomerates, with revenues in 2007-08 of 131,535.88 crore, the equivalent of
about 3.8 per cent of the country's GDP, and a market capitalization of $77.5
billion as on August 13, 2008. TATA companies together employ some 289,500
people. The Group's 27 publicly listed enterprises — among them stand out
names such as TATA Steel, TATA Consultancy Services, TATA Motors and
TATA Tea — have a combined market capitalization that is the highest among
Indian business houses in the private sector, and a shareholder base of over 2.9
million. The TATA Group has operations in more than 85 countries across six
continents, and its companies export products and services to 80 countries.
4
The TATA family of companies shares a set of five core values: integrity,
understanding, excellence, unity and responsibility. These values, which have
been part of the Group's beliefs and convictions from its earliest days, continue to
guide and drive the business decisions of TATA companies.
5
2.2 LEGACY OF TATA GROUP
There is a difference between making money for oneself and creating wealth for
others. This is the story of a business house that has created wealth for a nation.
It is a story of struggle, anxiety, adventure and achievement. This is the story of
our pioneers.
Jamshedji Tata: The founder of the Tata Group began with a textile mill in
central India in the 1870s. His powerful vision inspired the steel and power
industries in the country, set the foundation for technical education, and helped
India leapfrog from backwardness to the ranks of industrialised nations.
Sir Dorabji Tata: Through his endeavours in setting up Tata Steel and Tata
Power, this elder son of Jamshedji Tata was instrumental in transforming his
father's grand vision into reality. It was also under his leadership that the Sir
Sulphur % 0.060max 0.050maxPhosphorous % 0.060max 0.045S&P % 0.110max 0.090maxNitrogen ppm - 100max*(Typical Values for 90% of heats)**(In case of weldable bars the carbon content
31
should be 0.25% max)
2.Mechanical Properties.
Because of their unique method of manufacture, TATA TISCON
Bars possess a combination of strength and ductility that is far in
excess of the minimum limits specified in the standard is: 1786 in case
of yield strength for TATA TISCON, though the standard specifies 415
N/mm2 and designers use this value for design, the typical values are
as high as 450 N/mm2. For the same product, the typical value of
ductility as measured by elongation is 18%minimum as against
Because of their unique method of manufacture, TATA TISCON bars
possess a cothe standard value of 14.5% minimum. Undoubtedly, this
ductility is a guarantee of higher levels of safety.
Mech. Properties
Unit
IS : 1786 Fe 415
TATA TISCON*
Yeild Stress N/mm
415 min 450 min
Tensile Stress
N/mm2
10% over YS 520 min
Elongation % Min
14.5 min 18 min
*(Typical Values for 90% of heats)
Bond Strength:
The rib pattern of TATA TISCON bars has been specially designed to ensure that
excellent bond strength exists between the bar and the surrounding concrete.
32
The ribs are cut by automated milling machines which produce uniform and
concrete ribs. While the specification stipulates that bond strength should be 40%
higher than that of Mild Steel plain bars, TATA TISCON has values, which are
100-200% higher than those of Mild Steel Bars.
Bending:
The tough outer surface and core of TATA TISCON results in a rebar with
excellent values of bend ability. The bar can be bent around mandrels much
smaller than those specified in IS 1786. This has obvious advantages at
construction sites.
Weld ability:
TATA TISCON due to its low carbon equivalent has a weld ability which is
superior to conventional cold twisted bars. It can be butt-welded or lap-welded
using ordinary rutile coated electrodes of matching strength. In manual arc
welding no prewarming or post heat treatment is necessary.
Corrosion Resistant Characteristics:
TATA TISCON is produced by thermo-mechanical treatment and not by cold
twisting. Therefore, there are no torsion residual stresses in the bar, which result
in superior corrosion resistance characteristics compared to traditional cold
twisted bars.
Dimensional Tolerances:
TATA TISCON is supplied with section weight lower than the nominal, is
guaranteed for not more than the nominal, and is guaranteed for not more than
1% heavy.
Seismic Resistance Properties:
33
Studies were conducted on concrete beam column joints reinforced with TATA
TISCON to evaluate its performance under repeated reversed loading with
inelastic strains as would be encountered during an earthquake. The energy
dissipation was found to be almost same for each cycle; indication uniformly
maintained ductility till failure. The tests revealed superior seismic resistance
properties for TATA TISCON.
TATA TISCON strength and ductility exceeds the minimum level specified by IS:
1786 standards. While normal yield strength specifies 415N/ mm2 TATA TISCON
has yield strength of 450/mm2 which ensures stronger homes.
34
FLOW CHART OF PRODUCT PROPERTIES
35
Product Range TATA TISCON bars are available in the following size range: 8, 10, 12, 16, 20, 22, 25, 28, 32, 36, & 40 mm
in weighing, free home delivery. Unique single piece selling, same price all over
India.
6.2 WEAKNESS: price fluctuation higher price.
6.3 OPPORTUNITY: fast developing real estate business, launch of new
super ductile product.
6.4 THREATS: basically no threats have seen but unorganized segment if not
controlled then it can be a potential threat in near future.
50
Unique single rod selling: In this concept, TATA has introduced a new
strategy of selling single piece as compared to the selling by weight.
Free home delivery: TATA has introduced free home delivery for the
I.H.B. segment.
Price fluctuation: weakness observed was that TATA changes its price
every 6 months which when compared with others players is fast by 6
months.
New super ductile product: recent launch of new super ductile product
has prove to be an opportunity for the company as it is much superior
quality then the existing product offered by the competitors.
51
Fig. SWOT analysis.
52
Chapter 7. Conclusion
As it can be concluded from data interpretation and analysis that TATA STEEL
LIMITED has got a good future in steel industry because today it is maintaining
an effective channel distribution and management. Channel management is said
to be the backbone of any business and is one of the important factor behind the
successful story of any business. In Indian market where no. of intermediaries
are more here to be successful coordination should be there.
TATA STEEL LIMITED is maintaining an effective channel distribution and
management.
TATA has got a good future in steel industry.
80% of the dealers were exclusive TATA TISCON dealer and they are
proud to be associated with this brand, due to various factor such quality,
brand name, international standard followed by company etc.
Profit margin is not greater then other companies (both from organized
and unorganized).
Negative aspect according to the dealers were price fluctuation,
monopolistic restriction, no credit facility, higher price.
Company has made some restrictions on the dealers.
THE dealers contacted for the purpose of research quoted that the end
customer are satisfied to 85% irrespective of the higher price they are
paying for the product because they regard quality as the prime factor in
their purchasing decision. Some of the other factor for which customer
prefer to buy TATA REBARS are free home delivery, fair weigh,
53
international design of rebar, corrosion resistant property, higher ductility,
higher weld ability etc.
No discount is given to the dealers. It may be the reason of dissatisfaction
of some dealers.
It was found that about 75% of the dealers were found to be satisfied with
the distribution channel and management of both the companies i.e. TATA
& DTC.
Effective and timely communication is the backbone of a good channel
management. TATA and D.T.C. are having effective communication with
dealers and customers.
The end customer are satisfied to 85% .
“In India it is believed that doing business is building relation”, so to be
successful in Indian market you have to maintain a good relation with the
intermediaries and end consumer, and TATA is maintaining it very effectively.
The punch line of TATA is clearly depicting it clearly “ATOOT JOOD” both in term
of quality and relation with customer and intermediaries.
54
Chapter 8. Recommendation and suggestions
Through the analysis of the data collected and through market study following recommendations are suggested:
1. Should try to convince dealer’s with less capital to be exclusive by making them agree on the point that future scope of TATA in steel sector is bright and better quality and brand name is going to the most preferable point in the eye of customer.
2. TATA should try to give more margins to its dealer so that better hold of the market.
3. Positive aspect according to the dealer should be maintained and other strong advantage should be looked for such as price, higher rate of production.
4. Price fluctuation should be stopped and if not then its should be avoided for as long as possible, if fluctuation is done it should be done after competitor has revised their rates.
5. No new scheme and policy should be forcibly implemented if a policy is to be made then it should be taken care of that the interest of the small dealer should not be hampered.
6. Credit facility should be given so that market share could be increased,
as in Indian market credit given and taken is the essence of Indian market.
7. Price rate should be brought down as other players are having advantage of low price.
8. The types of benefit given by D.T.C. are very good and they are appraised by dealer.
55
9. Customer review is found to be satisfactory and it should be maintained in future.
10. Company should try to give discount in off season (monsoon).
11. Dealer satisfaction is found to be satisfactory, and should be maintained in future.
12. Start advertisement campaign again on television, radio and Internet
also. Do intensive marketing for business opportunity and products both.
13. Build trust upon customers through services.
14. Provide part time training.
15. Do some social activities through which company could get benefit of marketing indirectly.
56
Questionnaire.
1. Whether the dealer is an exclusive? YES/NO
2. Is profit margin better then other companies (Both from organized and unorganized)? YES/NO
3. Is there any Additional benefit given by D.T.C.? YES/NO
4. Whether dealers are satisfied with company? YES/NO
5. Is there any restriction imposed by distributor YES/NO
Or company?
6. Is Discount given to them? YES/NO
7. Satisfaction of customer, YES/NO
8. Is there any credit facility by company? YES/NO
9. Is there any price fluctuation in the market? YES/NO
10. Does price differ from area to area? YES/NO
11. Prompt supply of the product. YES/NO
12. Does company provides any traning for launching YES/NO Of a new product?
13. Free home delivery by the company. YES/NO
57
BIBLOGRAPHY
I have consulted many sources of information to furnish my project report. I have
tried my best to put comprehensive matter regarding all those things come under
my project area. I have gone through several sources of information. These are