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A SUMMER INTERNSHIP REPORT ON

ANALYSIS OF PHYSICAL DISTRIBUTION OF HZL IN DOMESTIC MARKET

AT

Under the guidance of

Mr Santosh Pullewar

Submitted by

Ram Paliwal

For
http://indiraiimp.edu.in/http://www.hzlindia.com/index.aspxhttp://indiraiimp.edu.in/http://www.hzlindia.com/index.aspxhttp://indiraiimp.edu.in/http://www.hzlindia.com/index.aspx


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Contents Pageno.

1 ACKNOWLEDGMENT

2 PREFACE

3 CHAPTER-1 INTRODUCTION OF STUDY

4 CHAPTER-2 INDUSTRY PROFILE

5 CHAPTER-3 COMPANY AND PRODUCTPROFILE

6 CHAPTER-6 LITRETURE SURVEY

7 CHAPTER- 7 OBJECTIVES OF REPORT

8 CHAPTER-8 RESEARCH METHODOLOGY

9 CHAPTER-9 DATA ANALYSIS

10 CHAPTER-10 FINDINGS

11 CHAPTER-10 CONCLUSIONS

12 CHAPTER-11 SUGGESTIONS

13 Annexure

14 BIBLIOGRAPHY


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15 Glossary of technicalwords


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CHAPTER-1


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INTRODUCTION


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CHAPTER - 2


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VEDANTA AN OVERVIEW

They are an LSE-listed diversified FTSE 100 metals and mining company, and Indias largestnon- ferrous metals and mining company based on revenues. Their business is principally locatedin India, one of the fastest growing large economies in the world.

In addition, they have additional assets and operations in Zambia and Australia. They areprimarily engaged in copper, zinc, aluminium and iron ore businesses, and are also developing acommercial power generation business.

They have experienced significant growth in recent years through various expansion projects fortheir copper, zinc and aluminium businesses and their acquisition of Sesa Goa in April2007, which enabled us to enter the iron ore business. Revenue from their businesses increasedfrom $3,701.8 million in fiscal 2006 to $7,930.5 million in fiscal 2010, representing a compoundannual growth rate of 21%.

They believe their experience in operating and expanding their businesses in India will allow usto capitalise on attractive growth opportunities arising from Indias large mineral reserves,relatively low cost of operations and large and inexpensive labour and talent pools.

They believe they are also well positioned to take advantage of the significant growth inindustrial production and investments in infrastructure in India, China, Southeast Asia and theMiddle East, which they expect will continue to create strong demand for metals.

Vedanta

Resources plc

Vedanta Resources plc is a diversified metals and mining company with revenues inexcess of US$6 billion. They are proud to be the first Indian manufacturing company to

be listed on the London Stock Exchange.

Their experienced workforce of over 30,000 people is distributed among their operatinglocations in India, Zambia and Australia.


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The principal members of their consolidated group of companies are as follows:

COPPER BUSINESS

Sterlite Industries (India) Ltd. Sterlite is headquartered in Mumbai. Sterlite has been a public listedcompany in India since 1988, and its equity shares are listed and traded on the NSE and the BSE, andare also listed and traded on the NYSE in the form of ADSs. Vedanta owns 53.9% of Sterlite and havemanagement control of the company.

Konkola Copper Mines. They own 79.4% of KCMs share capital and have management control ofthe company. KCMs other shareholder is ZCCM Investment Holdings Plc. The Government ofZambia has a controlling stake in ZCCM Investment Holdings Plc.

Copper Mines of Tasmania Pty Ltd. CMT is headquartered in Queenstown, Tasmania. Sterliteowns 100.0% of CMT and has management control of the company.

ZINC BUSINESS

Hindustan Zinc Limited. HZL is headquartered in Udaipur in the State of Rajasthan. HZLs equityshares are listed and traded on the NSE and BSE. Sterlite owns 64.9% of the share capital in HZL andhas management control. Sterlite has a call option to acquire the Government of Indias remainingownership interest.

ALUMINIUM BUSINESS

Bharat Aluminium Company Ltd. BALCO is headquartered at Korba in the State of Chhattisgarh.Sterlite owns 51.0% of the share capital of BALCO and has management control of the company. The

Government of India owns the remaining 49.0%. Sterlite exercised an option to acquire theGovernment ofIndias remaining ownership interest in BALCO in March 2004.

Vedanta Aluminium Ltd. Vedanta Aluminium is headquartered in Lanjigarh, State of Orissa.Vedanta owns 70.5% of the share capital of Vedanta Aluminium and Sterlite owns the remaining29.5% share capital of Vedanta Aluminium.

IRON ORE BUSINESS

Sesa Goa Limited. Sesa Goa is headquartered in Panaji, India, and its equity shares are listed andtraded on the NSE and BSE. They own 57.1% of Sesa and have management control of the company.

COMMERCIAL POWER GENERATION BUSINESS

Sterlite Energy Limited. Sterlite Energy is headquartered in Mumbai. Sterlite owns 100.0% ofSterlite Energy and has management control of the company.

Madras Aluminium Company Ltd. MALCO is headquartered in Mettur, India. MALCOs equity sharesare listed and traded on the NSE and BSE. They own 93.9% of MALCO s share capital and have managementcontrol of the company


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MISSION

Their mission is to be a world-class metals and mining group and generate

superior financial returns.

THEIR VALUES

ENTREPRENEURSHIP

They foster an entrepreneurial spirit throughout their businesses and value the ability to foreseebusiness opportunities early in the cycle and act on them swiftly. Whether it be developingorganic growth projects, making strategic acquisitions or creating entrepreneurs from within,they ensure an entrepreneurial spirit at the heart of their workplace. Their ability totranslate an idea into reality within the shortest possible timeframe is critical to their rapid

growth and diversification into new areas and commodities.

People are their most important asset and from day one they actively encourage them to seeknew opportunities and pursue their goals. They have fostered this entrepreneurial spirit amongstthe individuals and communities who form a part of their entire value chain.

GROWTH

They continue to deliver industry-leading growth and generate significant value for theirshareholders. Moreover, their organic growth pipeline is unrivalled and they are confident thatthey will continue to deliver significant growth for shareholders in the future. They have

pursued growth across all their businesses and into new areas, always on the basis that valuemust be delivered. They do not believe that they are the only beneficiary of their growth. Theysee growth as a means to increase the wealth and prosperity of their society at large.

They clearly recognise the benefits that their growth brings to their key stakeholders and the

communities in which they operate. Their growth has enabled us to significantly enhance the lives of

hundreds of thousands of people in both India and Africa, and has helped to raise their living

standards significantly

EXCELLENCE

Achieving excellence in all that they do is their way of life. They consistently deliver projects

ahead of time at industry-leading costs of construction and within budget. They are constantlyfocused on achieving a top decile cost of production in each of their businesses. To achieve this,they follow a culture of best practice benchmarking. Their tonne-for-tonne explorationphilosophy is to replace each tonne of ore mined out with at least one tonne of new resource.

Equally important to us is achieving benchmarks in health, safety and environmentstandards. It is their people who make all this possible. They benchmark their operations andidentify opportunities for continuous improvement and projects with high potential. Without


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this commitment to excellence, they would not have been able to achieve their growth andexpansion they have managed to date.

TRUST

The trust that their stakeholders place in us is key to their success. They recognise that theymust responsibly deliver on the promises they make to earn that trust. They constantly strive tomeet stakeholder expectations of us and deliver ahead of expectations. They always behavein a manner that is consistent and upholds their value system. Trust is also their stakeholdersbelief that they will always act in a competent manner. They take feedback seriously and actupon it. They continuously work to improve ourselves and enhance their ability to deliver at alltimes.

They actively foster a culture of mutual trust in their interactions with theirstakeholders and encourage an open dialogue which ensures mutual respect. They believethat this is part of being a good corporate citizen.

SUSTAINABILITY

They practice sustainability within the framework of well defined governance structures andpolicies and with the demonstrated commitment of their management and employees. Theirsustainability team comprises over 425 full time resources and over 600 extension workers.They aim not only to minimise damage to the environment from their projects but to make a netpositive impact on the environment wherever they work.

They fully recognise the importance of including local communities and other keystakeholders in their development strategy to ensure that their impact is positive. Rather thansimply providing aid, they aim to create sustainable livelihood opportunities improving thequality of life for society and contributing to the basics of life harmoniously.

They believe that the principle of sustainability is a key component of conducting business in aresponsible manner and it is a primary aim of Vedanta to operate as a good corporate citizen


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EXECUTIVE DIRECTORS:

ANIL AGARWAL(Executive Chairman)Mr Agarwal, who founded the Group in 1976, is also Chairman of Sterlite and is aDirector of BALCO, HZL, and Vedanta Alumina Ltd. Since 1976 the Group hasgrown under his leadership, vision and strategy. Mr Agarwal has over 30 yearsexperience as an industrialist.

NAVIN AGARWAL(Deputy Executive Chairman)Navin Agarwal, Deputy Executive Chairman of Vedanta, is responsible for the Groupsbusiness strategy as well as overseeing its overall performance and growth. He chairsthe Groups Executive Committee. In this role, he directs the planning, execution, andcompletion of the pipeline of strategic organic growth projects as well as bringingtogether business heads and financial heads to ensure best practices are shared and

implemented.

Mr. Agarwal is also responsible for inorganic growth, strategic treasury and fundraising initiatives, and global investor relations as well as augmenting and managingthe top talent of the Group. He has25 yearsexperience in strategic and business management.

MS MEHTA(Chief Executive)Mr Mehta was previously CEO for Hindustan Zinc Ltd and joined the Group in 2000.Prior to moving as CEO of HZL, he was the Commercial Director (Base Metals)responsible for the marketing ofcopper, aluminum, zinc and lead, procurement of copper concentrate, export andtolling of zinc concentrate and coal procurement.


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Before joining the Group, Mr Mehta was with Lloyds Steel Industries Ltd, where hehandled wide ranging portfolios; marketing, procurement, working capital financeand projects.

Mr Mehta has a Mechanical Engineering degree from MBM Engineering College and an

MBA from the Indian Institute of Management, Ahmedabad.

NON EXECUTIVE DIRECTORS:

NARESH CHANDRAMr Chandra joined the Board in May 2004. Mr Chandra was Home Secretary in India in 1990,Cabinet Secretary from 1990 to 1992, Senior Adviser to the Prime Minister of India from 1992 to1995 and the Indian Ambassador to United States of America from 1996 to 2001.

He was Chairman of the Indian Government Committee on Corporate Governance & Audit from

2002 to 2003 and was Chairman of the Committee on Civil Aviation Policy in 20042005. He was awarded the prestigious award of Padma Vibhushan by the HonourablePresident of India this year.Mr Chandra has a Masters degree in Mathematics from Allahabad University.

AMAN MEHTAMr Mehta, a senior banker, joined the Board in November 2004 following his retirement fromHSBCwhere he had a career spanning 36 years. He held numerous positions, includingChairman and Chief Executive Officer of HSBC USA Inc (the New York based arm ofHSBC Holdings plc), and as Deputy Chairman of HSBC Bank Middle East, based in

Dubai with responsibility for the HSBC Groups operations in the Middle East.

In 1999, Mr Mehta was appointed Chief Executive Officer of the Hong Kong andShanghai Banking Corporation, a position he held until his retirement. Mr Mehta has adegree in Economics from Delhi University. He now resides in Delhi and is a memberof a number of Corporate and Institutional Boards in India as well as overseas.


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EUAN MACDONALDMr Macdonald spent over 20 years with SG Warburg, specialising in emerging market finance.From1995 to 1999, Mr Macdonald was Chairman of SBC Warburg India, responsible forall the banks activities in India, and from 1999 to 2001, he was Executive ViceChairman of HSBC Securities and Capital Markets, India.Mr Macdonald has a degree in Economics from Cambridge University and a Masters degree inFinance and International Business from Columbia Business School.

WHAT VEDANTA DO

Vedanta Resources is a London-based FTSE 100 metals and mining group, diversified inoperations and inclusive in scope.

They currently operate in India, Zambia and Australia, with extensive interests in aluminium,copper, zinc and lead. They employ over 30,000 people in their various locations. In December2003, they proudly became the first Indian company to be listed on the London Stock Exchange.

Their vision is clear and committed: achieving and sustaining a global leadership position innon- ferrous metals.

Their mission is to become a million-ton per annum producer at the lowest decile costs in

aluminium, copper and zinc. In so doing, they will put India on the global metals and miningmap.

They have undertaken several greenfield and brownfield expansion projects in a number oflocations in order to achieve this goal. The capital expansions completed in the first phaseinvolved fairly complex project technologies, and an investment of $2.2 billion. They completedthese expansions in record time, at costs significantly lower than international benchmarks, andnow, the next phase of the expansion pipeline is currently underway.

India is a fast-emerging and attractive resource destination, and they believe theirstrategy and business objectives will harness India's high-quality wealth of mineral resources atlow costs of development, positioning it as a leader on the global metals and

mining map.' Chairman, Anil Agarwal

For thirty years, they have continually demonstrated their ability to deliver major value-creatingprojects, offering unparalleled growth at lowest costs and generating superior financialreturns for their shareholders. At the same time, they continue to ensure that their expansionprojects meet high conservative financial norms and do not place an unwarranted burden ontheir balance sheet and financial resources.

They develop and manage a diverse portfolio of mining and metals businesses to provide


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attractive returns to their shareholders, whilst always carrying out their activities in a sociallyand environmentally responsible manner, creating value for the communities where theyoperate. As one of the largest metals and mining groups in India, they remain continuallycommitted to managing their business in a socially responsible manner. The management ofenvironment, employees, health and safety and community issues, in respect of their operationsis central to the success of their business.

The majority of their operations are certified to the International Management SystemsStandard ISO14001. They have also won numerous awards for safety and environment: they won the2005

Recognition of Commitment Award from the Institute of Internal Auditors, USA, for theirdemonstrated strengths and continued focus on achieving operational efficiencies andprocessimprovements. Vedanta is the only manufacturing company out of a total of four Indiancompanies to have ever received this award; the other recipients from India are in thetechnology and banking sectors

COPPER

Their copper business is comprised of operations in India, Zambia andAustralia.

Their Indian copper business is principally one of custom smelting and is operated by Sterlite, while their

Zambian copper business is owned and operated by KCM. They own 59.9% of the share capitalof Sterlite and 79.4% of the share capital of KCM. Sterlite was Indias largest metals andmining company based on net sales in fiscal 2008. In addition, they own the Mt. Lyell coppermine in Tasmania, Australia, which provides a small percentage of Sterlites copper concentraterequirements.

Their Zambian operations are comprised of four mines, one at Konkola, two at Nchanga and oneat Nampundwe, a tailings leach plant at Nchanga and a smelter at Nkana. Their coppercathode production increased from 437,000 tonnes in fiscal 2006 to 507,000 tonnes infiscal 2010, representing a CAGR of 4%. The production increases, together with higher coppermarket prices, drove revenue of their copper business from $2,241.3 million in fiscal 2006 to$3,812.2 million in fiscal 2010, representing a CAGR of 14.2%.

The mid shaft loading station at Konkola Deep Mine Project was commissioned in March 2010as scheduled. This resulted in an increase in the hoisting capacity of the mine, which hasallowed the mining of ore to commence while simultaneously allowing the continueddevelopment of the shaft to an ultimate depth of 1,500 metres. Construction work on the bottom

shaft sinking us progerssing well for completion by end 2011.


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ZINC

Their fully integrated zinc business is owned and operated by HZL, Indias leading zincproducer with a 79.7% market share by volume of the Indian zinc market in fiscal 2008,according to the Indian Lead Zinc Development Association. HZL was the worlds fifthlargest zinc mining company in 2007 based on mine production and is also one of the top ten

lead mining companies by production volume worldwide, according to Brook Hunt. Sterliteowns 64.9% of the share capital of HZL.

HZLs operations include three lead-zinc mines, three hydrometallurgical zinc smelters, onelead smelter and one lead-zinc smelter in Northwest India and one hydrometallurgical zincsmelter in Southeast India. HZLs zinc production increased from 284,000 tonnes in fiscal2006 to 578,000 tonnes in fiscal 2010, representing a CAGR of 19.4%. The productionincreases, together with higher zinc market prices, drove revenue of their zinc businessfrom $875.5 million in fiscal 2006 to

$1,651.7 million in fiscal 2010, representing aCAGR of 17.2%.

HZL achieved the 1 mtpa zinc lead capacity through recent commissioning of the 210,000tonnes zinc smelter in Rajpura Dariba. The 100,000 tonnes lead smelter and the associated160 MW capitve power plant is progressing well and on schedule for completion byQ2FY2011.

HZL expects to increase its silver production from the current levels of approximately 100-120tonnes per year to a level of approximately 500 tonnes per year in the form of silver andsilver bearing residue. A large part of this increase would be from the Sindesar Khurd minewhere silver occurrences are approximately at levels of 200 ppm and from the use ofappropriate technology in the new smelters.

The ongoing explorationn activities at HZL has yielded significant success with an increaseof 33.7 mt gross reserves and resources, prior to depletion of 7.1 mtpa in FY2010. TotalReserves and Resources as at 31 March 2010 stand at 298.6 mt containing 34.1 mt of zinc leadmetal and 832.7 moz of silver.

ALUMINIUM

Their aluminium business is primarily owned and operated by BALCO. Sterlite owns 51.0% of

the share capital of BALCO. Vedanta Aluminium also contribute to their aluminium business.

They own

94.5% of the share capital of MALCO and 70.5% of the share capital of Vedanta

Aluminium, with Sterlite owning the remaining 29.5% of Vedanta Aluminium. BALCOreceived a coal block allocation of 211.0 million tonnes for use in its captive power plants.


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In addition, they are expanding their aluminium business through Vedanta Aluminium. InMarch 2007, Vedanta Aluminium began the progressive commissioning of a 1.4 mtpagreenfield alumina refinery project and an associated 90 MW captive power plant, at Lanjigarhin the State of Orissa. Vedanta Aluminium is also building a greenfield 500,000 tpa aluminiumsmelter, together with an associated 1,215 MW captive power plant, in Jharsuguda in theState of Orissa, in two phases of 250,000 tpa each. Commissioning of the first phase

commenced in May 2008, and they expect the second phase to begin commissioning in 2010.

They also recently announced a $7.8 billion investment programme to increase their fullyintegrated aluminium smelting capacity to nearly 2.6 mtpa by 2012. Upon completion, this isexpected make us Asias largest and among the top 5 integrated producers of aluminiumworldwide.

India is positioned to become one of the worlds largest producers of aluminium, with the 4thlargest reserves of bauxite globally of c2.3 billion tonnes and the 4th largest reserves of coalworldwide of over 250 billion tonnes. Of these reserves, over 1.4 billion tonnes of bauxite and62 billion tonnes of coal reserves are co-located in the State of Orissa alone. Vedantasexisting presence in the region, together with its excellent track record of executing projects

ahead of time and at low capital costs, make it ideally placed to lead the development of theseabundant bauxite and coal reserves.

India also has the benefit of a fast growing domestic market with close proximity to the high growth

markets of Asia and the Middle East. Demand for aluminium globally is projected to grow strongly at a

compound rate of 5.7% between 2007 and 2020, with India and China projected to grow at 8.2% and

9.7%, respectively in the same period.

The next phase of brownfield growth projects comprises a 1,250 kt aluminium smelter project inJharsuguda, Orissa (the Jharsuguda II Project), as well as a 325 kt aluminium smelterproject together with an associated 1,200 MW captive thermal power plant in Korba,

Chattisgarh (the Korba III Project). Correspondingly, they will also increase their aluminaproduction capacity at Lanjigarh from 1.4 mtpa to 5 mtpa.

The Jharsuguda II Project will comprise four pot lines, each containing 336 cells. The firstproduction is scheduled for Q2FY2011 and it will be fully commissioned in Q2 FY2013.

The Korba III Project will comprise one single pot line containing 336 cells and isexpected to produce first metal by October 2010. It will be fully commissioned bySeptember 2011. The associated captive thermal power plant will comprise four units of 300MW each. The commissioning of the power plant units is being scheduled to meet the powerrequirement of the new Korba smelter.

The increase in alumina production capacity will be achieved by debottlenecking the capacity ofthe existing 1.4mtpa alumina refinery by an additional 0.6 mtpa by Q3FY2011 and buildingthree new production streams of 1 mtpa each. The first production is scheduled for Q4FY2011and and it will be fully commissioned by Q3FY2012.

The estimated investment in the aluminium smelter projects is $2.9 billion for the Jharsuguda II

Project and $1.8 billion for the Korba III Project. The total additional investment in Lanjigarh is

estimated at $1.7 billion. This investment includes the cost of building the aluminium smelters and the


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alumina refinery, and all necessary infrastructure including railway networks and water pipelines.

The investment will be funded through a combination of existing cash, internal cash accruals and external

financing.

IRON ORE

Their iron ore business is owned and operated by Sesa Goa, Indias largest producer-exporterof iron ore in the private sector by volume in fiscal 2007, according to the Federation of IndianMineral Industries. In April 2007, they acquired a 51% ownership in Sesa Goa, which owns88.3% of the share capital of SIL. Sesa Goa is engaged in the exploration, mining andprocessing of iron ore. Sesa Goa owns or has the rights to proved and probable reserveswhich consist of an estimated 352.7 million tonnes of iron ore.

In fiscal 2010, Sesa Goa produced approximately 21.4 million tonnes of iron ore fines andlumps. Sesa Goas mining operations are carried out in the Indian States of Goa, Karnatakaand Orissa. In addition, Sesa Goa manufactures pig iron and metallurgical coke. DuringFY2010, revenue from their iron ore business was $1,221.7 million.

POWER GENERATION

Their Commercial Power generation business comprises of the sale of power from 100MWplant at MALCO, 270 MW plant at BALCO - I and 123 MW wind power plant at HZL, and thesurplus power sales from various captive power plants.

They are setting up a 2,400 MW (600 MW*4) coal based commercial power plant atJharsuguda, Orissa. The first unit of 600 MW is expected to be commissioned by Q1FY2011with the remianing three units to be progressively commissioned by end FY2011.

They are also setting up an 1,980 MW super critical IPP project in Talwandi Sabo in Punjab.

The project is expected to be progressively completed by Q2FY2014.

They currently operate in India, Zambia and Australia through their various

subsidiaries.

AUSTRALIA

CMT is an integrated producer of copper which currently produces 30,000 tpa of copperconcentrate.This is supplied entirely to Sterlites copper smelter operationsin India.

ZAMBIAKCM is the largest mining and metals company in Zambia, with annual capacity of 200,000tpa of copper.

INDIASTERELITE is a leading producer of copper in India. It pioneered the manufacturing ofcontinuous cast copper rods in India, and established India's largest copper smelting andrefining plant for production of world class refined copper.


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MALCO has a power plant with a generation capacity of100 MW.

BALCO has a capacity of 245,000 tpa aluminium, 510 MW captive power plant. BALCOalso has a 270 MW power plant which currently sells power in the commercial market.

VAL comprises Lanjigarh alumina refinery with an initial installed capacity of 1.4 million tpa and

associated captive power plant. It also includes the 500,000 tpa aluminum smelter, together with an

associated thermal coal-based 1,215 MW captive power plant in Jharsuguda.

Vedanta acquired 51% stake in Sesa Goa. A well-established company with over fifty years of operations,

Sesa is India's largest private sector iron ore producer-exporter. Sesa currently produces over 21 million

tonnes of iron ore, of which over 90% is exported to leading global steel companies in China, Europe and

Japan.


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CHAPTER- 3


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HZL

OVERVIEW :

HZL is India's largest and world's second largest integrated producer of zinc & lead, with a global

market share of approximately 6.0% in zinc. They are one of the lowest cost producers in theworld and are well placed to serve the growing demand of Asian countries. Hindustan Zinc is a

subsidiary of the NYSE listed - Sterlite Industries (India) Limited (NYSE: SLT) and London listed

FTSE 100 diversified metals and mining major - Vedanta Resources plc.

Their core business comprises of mining and smelting of zinc and lead along with captive power

generation. They have four mines and three smelting operations: mines are situated at

Rampura Agucha (largest zinc producing mine in the world), Sindesar Khurd, Rajpura Dariba and

Zawar in the State of Rajasthan; while the smelters are located at Chanderiya and Debari in the State

of Rajasthan and Vizag in the State of Andhra Pradesh. In March 2010, we have successfully

commissioned our

210 ktpa Hydro Zinc Smelter at Dariba Smelting Complex in the state ofRajasthan.

Their current metal production capacity is 964,000 tonnes per annum (879,000 tonnes of zincand

85,000 tonnes of lead). The ore production capacity stands at 8.40 million tonnes per annum.

They also own 314 MW of coal based thermal captive power plants in Rajasthan to support

our metallurgical operations. As a green energy initiative, we also have 123.2 MW of wind energy

in Gujarat and Karnataka, which is sold to the respective State grids

Vision :

To be a world-class zinc company, creating value, leveraging mineral resources and related core

competencies

Mission:

Be a lowest cost zinc producer on a global scale, maintaining market leadership

One million tonne zinc-lead metal capacity by 2010

Be innovative, customer oriented and eco-friendly, maximizing stake-holder value

Our BoardBoard of Directors Profiles

Mr. Agnivesh Agarwal - Chairman

Mr. Akhilesh Joshi - COO & Whole-time Director

Ms. Ajita Bajpai Pande - Director

Mr. Sanjiv Kumar Mittal - Director


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AN OVERVIEW- OUR MAJOR AREAS

MINES:

1. Rampura Agucha Mine is the world's largest zinc mine with an annual ore

production capacity of 6.0 million tonnes. In FY 2009, Rampura Aguchaproduced 591,743 tonnes of contained zinc and 56,946 tonnes of contained

lead. The successful commissioning of 1 mtpa concentrator in March 2010, has

enhanced its ore production capacity from 5.0 million tonnes per annum to 6.0

million tonnes per annum. Rampura Agucha is also one of the lowest cost zinc

producer globally.

2. Sindesar Khurd Mine is the second largest ore body in the portfolio of

Hindustan Zinc mines with reserves and resources base of over 56 million

tonnes after Rampura Agucha. Sindesar Khurd has annual ore productioncapacity of 0.30 million tonnes and achieved a production level of 11,870

tonnes of contained zinc and 5,350 tonnes of contained lead in FY

2009. We plan to increase the current ore production capacity of Sindesar

Khurd from 0.30 mtpa to 1.50 mtpa.

3. Rajpura Dariba Mine has annual ore production capacity of 0.90

million tonnes and achieved a production level of 19,700 tonnes of contained

zinc and 4,930 tonnes of contained lead in FY 2009. Bulk concentrate

production at Rajpura Dariba has resulted in significant recovery improvements

in Zinc, Lead and Silver

4. Zawar Mines have annual ore production capacity of 1.20 million tonnes and

achieved a production level of 28,190 tonnes of contained zinc and 16,580

tonnes of contained lead in FY 2009. Bulk concentrate production at Zawar

Mines has resulted in significant recovery improvements in Zinc, Lead and

Silver.


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SMELTERS

1. Chanderiya Smelting Complex (CSC) is the single largest zinc smelting complex in the world.

Its current metal production capacity is 610,000 tonnes per annum (525,000 tonnes per annum of

zinc and 85,000 tonnes per annum of lead). The main products are special high grade (SHG)

zinc, continuous galvanizing grade (CGG) Zinc, prime western (PW) zinc and pure lead. It alsoproduces a number of valuable by-products including silver and cadmium. Our Chanderiya

facility utilizes a combination of best proven technology and innovation to continuously improve

environmental and operational performance. This approach has enabled us to be one of the largest

and most efficient zinc and lead smelting complexes in the world.

2. Zinc Smelter Debari is a Hydrometallurgucal zinc smelter situated at Debari,

about 13 kms from Udaipur, in Rajasthan, India. The primary product of Debari is High Grade

(HG) zinc and it also recovers cadmium as by-product. Zinc Smelter Debari was commissioned in

the year 1968 with an initial production capacity of 18,000 tonnes per annum of zinc. In the

past several years the capacity of the smelter has been expanded five folds to its current production

capacity of 88,000 tonnes per annum of zinc.Zinc Smelter Debari employs state-of-the- art Roast Leach Electro-winning Technology at its

Hydro metallurgical zinc smelter. The plant has three roasting facilities, one leaching and

purification section, one electrolysis and one melting and casting sections. It produces extra

calcine an intermediate product which is supplied to the rest of the Hydro metallurgical zinc

smelters.

Zinc Smelter Debari also has 14.5 MW captive power plants (diesel generation

units) to supply the power requirements for its metallurgical operations; it also sources

additional power requirements from our captive thermal power plants located at

Chanderiya and at Zawar. It also has 7.3 MW of power generation capacity from Waste

Heat Recovery.

`The management system of Zinc Smelter Debari comprises of: the Quality SystemISO 9001:2008, the Environmental System ISO 14001:2004, Occupational HealthSafety and Assessment Series OHSAS 18001:2007, Social Accountability SA 8000 -2008; and is also a 5S Certified unit.

Roast Leach Electro-winning (RLE) process description

The hydrometallurgical smelting process is a roast, leach and electro-winning(RLE)

process. In this process zinc concentrate is first oxidized in the roaster and the gases

generated are cleaned and sent to the sulphuric acid plant. The primary output from the

roaster, called calcine, is sent to the leaching plant to produce a zinc sulphate solution that is

then passed through a cold/hot purification process to produce purified zinc sulphate

solution. The purified zinc solution then goes through an electrolysis process to produce

zinc cathodes. Finally, the zinc cathodes are melted and cast into zinc ingots.

3. Zinc Smelter Vizag is a hydrometallurgucal zinc smelter situated at Vizag, in the State ofAndhra Pradesh, India. The primary product of Vizag is High Grade (HG) zinc and it also


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recovers cadmium as by-product.

Zinc Smelter Vizag was commissioned in the year 1978 with an initial production capacity of

30,000 tonnes per annum of zinc. In the year 2003 the capacity of the plant had

been expanded to 56,000 tonnes per annum of zinc through de-bottlenecking.

Zinc Smelter Vizag employs state-of-the-art Roast Leach Electro-winning Technology atits Hydro metallurgical zinc smelter.

The management system of Zinc Smelter Vizag comprises of international standards: the

Quality System ISO 9001:2008, the Environmental System ISO 14001:2004, Occupational

Health Safety and Assessment Series OHSAS 18001:2007 and Social Accountability

SA 8000:2008.

Roast Leach Electro-winning (RLE) process description

The hydrometallurgical smelting process is a roast, leach and electro-winning (RLE) process.

In this process zinc concentrate is first oxidized in the roaster and the gases generated are

cleaned and sent to the sulphuric acid plant. The primary output from the roaster, called

calcine, is sent to the leaching plant to produce a zinc sulphate solution that is then passed

through a cold/hot purification process to produce purified zinc sulphate solution. The

purified zinc solution then goes through an electrolysis process to produce zinc cathodes.

Finally, the zinc cathodes are melted and cast into zinc ingots

POWER

In line with our vision to be cost effective and fully integrated, we have captive power plants

at Chanderiya and Zawar with a total installed capacity of 314 MW. In addition we also

generate power from our Diesel Generation (DG) units and Waste Heat Recovery Plants

(WHRP) installed at Chanderiya, Debari and Zawar having a total installed capacity of 35

MW (DG Units) and 16.7 MW (WHRP).

With respect to our green energy initiative projects, we have successfully commissioned123.2 MW wind power plants in the States of Gujarat and Karnataka.

Captive Power Plants

Operations and maintenance of our power plants have been outsourced to the world's

renowned power plant maintenance and operations companies.

As a part of our power cost reduction measures, we have taken various initiatives to decrease

the cost of coal, the main cost driver. We have been successful in obtaining coal via coal

linkages, coal blocks, optimizing the blend of Indian and imported coal, keeping the

auxiliary consumption at a minimum and operating the power plants at a high plant load


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factor (PLF).

Any surplus power generated is sold to the State grid and power

exchanges. Key statistics for FY 2009:

During FY2009, total power generated was 1,986 million units (MU), an increase

of over 50% as compared to FY2008.

During the year, we received an approval for 35,000 tonnes per month of

coal through the linkages. We also have a coal block of 31.5 million tonnes which

is a joint venture with five other parties. The work on the coal block is progressing

per schedule.

Our persistent efforts in operating the plants in most efficient way have been recognized by

way of various awards including, Asian Power Plant of the year Award, Best Emission

reductions project in Asia, National Competition for Excellence in Water Management by the

Confederation of Indian Industry (CII) and Innovative Case Study and Water Efficient Unit.

Wind Power Plants

We have successfully commissioned 123.2 MW wind power plants in the States ofGujarat and Karnataka. The power generated is sold to the respective state grids.

Our wind energy mills have state-of-the-art gearless synchronous wind turbine generator

technology which helps in higher power generation.

During the year, we produced 230.5 million units (MU) of wind power, an increase of 122% as

compared to FY2008.

Our wind energy project in Gujarat has achieved the highest per Wind Turbine Generator

(WTG) power generation amongst its peer group in Gujarat.*

Our Wind energy projects at Gujarat and Karnataka are registered under the United

Nations Framework Convention on Climate Change (UNFCCC's) Kyoto protocol for Clean

Development Mechanism (CDM).

Source: Gujarat Energy Development Authority (GEDA)


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RESEARCH CENTER

Central Research & Development Laboratory (CRDL) was established in the year 1977

and is functioning since then for the continuous improvements in operating practices

and technologies, in order to meet the demands of highly competitive business

environment. Our dedicated team at CRDL aims to establish the Company's image as aleading technology-driven company through in-house development of path breaking

technologies and by working closely with technology leaders, universities, and research

institutions in India and overseas.

The Research & Development area involves key value drivers to the business mainly

pertaining to improvement in product quality and production processes to enhance

metal recovery, reduce specific consumptions, waste management and metal recovery

from by-products or intermediates. Six-sigma practices are being used for faster high

quality outcomes in the research projects.

CRDL is recognized from Department of Scientific and Industrial Research (DSIR)

and listed in online directory of testing laboratories of American Society for Testing

and Materials (ASTM).

The management system of CRDL comprises of three international standards: theQuality System ISO

9001:2008, the Environmental System ISO 14001:2004, Occupational Health Safetyand Assessment

Series OHSAS 18001:2007. It is also a 5 - S workplace managementcertified unit.

MINERAL PROCESSING :-

Batch Testing Facilities & Continuous

Testing Facility

Crushing, Grinding, Sizing, Gravity Separation,Froth-Flotation

Portable continuous stage-flotation testing (Mini Flotation) unit along with

slurry pumping and reagent dosing systems

Mineral

Processing Pilot

Plant

Continuous basis, 2 TPD capacity, Stage-Crushing & Wet Grinding, Froth

Flotation, Wet / dry grinding ball mill 4 MT /day


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EXTRACTIVE METALLURGY :-

Pyrometallurgy & Hydrometallurgy

Furnaces: Pit furnace, High temperature furnace .

Lab scale leaching and downstream facilities, Pilot scale leaching plant (200 L & 1.5 m3capacity)

Bioleaching : Laminar flow work-station, Autoclave, Incubators (Stationary and shaking),Cooling centrifuge (Normal and high speed cooling), Bioleaching Reactors, Bioleachingcolumns for bench scale testing.

MATERIAL CHARACTERIZATION/ ANALYTICAL :-

Petromineralogy facilities with Image Analyzer software, X-Ray Diffraction, X-Ray

Fluorescence, Atomic Absorption Spectrophotometer (with GTF and vapor generation

unit), UV-vis Spectrophotometer, Mercury Analyzer, Karl Fischer Apparatus for

Moisture determination, Wet Chemical Analysis.

Recovery improvement through production of bulk concentrate in place of

separate Lead and Zinc concentrates. The in-house process to produce bulk

concentrate was developed at laboratory scale with an objective to improve metal

recoveries at mines. The project was scaled up and implemented at mines seamlessly

without any shutdown. Significant improvement in recoveries of Pb, Zn and Ag is

obtained at Zawar & RD Mines. About 3 Cr/annum & 10 Cr/annum revenue generation

is achieved at Zawar & RD Mines respectively.

Modeling and simulation of grinding circuits for better parameter controls, reduction

in milling power and increment in plant throughput. This was implemented at Dariba

and Zawar Mines.

Recovery of low grade Pb-Ag concentrate in Hydro-I, CLZS. A process to

recover Pb & Ag values (being lost in Jarosite) was validated and commissioned.

About 75-90 MT of residue is being produced daily. This has also resulted in reduction

of Jarosite volume generation with direct impact on reduction in solid waste

generation.

Flowsheet to recover Cadmium metal from the Cu-Cd cake A common plant forHydro, CLZS and Dariba Zinc smelter is to be installed for production of

cadmium metal of about 1600 MT/ annum. Feasibility studies for the project are

being carried out.

Use of Cupric chloride in RAM as a replacement for copper sulphate in zinc

flotation in RAM leading to saving in 50% of reagent cost and with increase in zinc


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recovery by 0.5-1.0%. This was tried for the first time in the world in any

beneficiation plant with expected revenue of INR 15

Cr/annum. The initial Plant trials over a period of 21 days with respect to consumption

and recovery were successful and the lab results were validated .

Quality improvement of RD concentrate by graphite elimination using pre-graphiteflotation before bulk flotation circuit. This will increase internal consumption of RD

concentrate. This will also lead to increased metal recovery (Pb, Zn, and Ag) by

enhanced process performance with increased revenue generation of INR 40 Cr/annum.

Silica in RAM zinc concentrate is in the upward trend. This affects leaching operation.

Optimization of process parameters in neutral leaching circuit was done and necessary

modifications have been incorporated in CLZS. Same with additional improvements are

suggested for VZS and project is in progress

Maximize bleed of Mg and Mn from hydro smelters by efficient operation of removal

section. It is important to bleed these heavy impurities which have an adverse impact on currentefficiency in cellhouse. Optimization of parameters was done to maximize bleed of theseimpurities from the system.

Study of size distribution of RA Zn concentrate, which is getting finer causing

increased flyover losses and variation in furnace bed temperature in Roasters. It is

important to blend RA zinc concentrates processed from different ores to optimize the

fines reduction. Studies for the same are being done leading to performance

improvement of Roasters.

Kinetic studies were performed and model was simulated to iron levels in Jarosite

overflow for different operating temperatures. This was implemented in Hydro - I,CLZS to bring down the iron levels in Jarosite overflow within permissible limits. This

has mitigated the requirement of additional retention time for Jarosite precipitation thus

avoiding further CAPEX involvement.

Development of a fast and reliable purity analysis method for the Nigrosine

reagent Critical and extensively used reagent for eliminating graphitic carbon

contamination in the lead and zinc concentrates; has facilitated in avoiding cumbersome

and time-consuming testing procedures.


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RESERVES and RESOURCES

Our exploration efforts have resulted in gross addition of 158.3 million tonnes of

reserves and resources, before depletion of 30 million tonnes, in the period from April

2003 to March 2009.

In FY2009, our ongoing exploration activities have yielded significant success withan increase of

46.3 million tonnes to its reserves and resources, prior to a depletion of 6.7 million

tonnes. Contained zinc-lead metal has increased by 4.7 million tonnes, prior to a

depletion of 0.7 million tonnes in FY

2009. Total reserves and resources as at 31 March 2009 were 272 million tonnes,

containing 31.5 million tonnes of zinc-lead metal. The reserves and resources

position has been independently reviewed and certified as per Australian Joint Ore

Reserves Committee (JORC) standard.

The success of our exploration efforts has primarily been at Rampura Agucha andSindesar Khurd mines, signified by reserve and resource base of 118.7 million tonnes

containing 19.1 million tonnes of zinc-lead metal at Rampura Agucha; and 56.6 million

tonnes containing 4.8 million tonnes of zinc- lead metal at Sindesar Khurd respectively.

PRODUCTS

We are India's largest and the world's second largest integrated zinc-lead producer; and

also one of the lowest cost zinc-lead producers in the world. We have mining, smelting

and power operations in multiple locations throughout India. Our principal products arerefined zinc metal and refined lead metal. In addition we also recover silver and

cadmium as by products.

Zinc and lead metal produced at our world class Chanderiya Smelting complex are

registered brands on the London Metal Exchange (LME). The LME brands are

recognized worldwide as one of the most demanding standards, signifying highest

product quality, uniform physical characteristics and consistency of ingots. This re-

emphasizes our capability and commitment to meet the world class standards.

We also have Quality Management Systems in place for all our products which

complies with the requirements of ISO 9001:2008 standards.

Our principle products are

zinc and lead


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ZINC:We produce refined zinc metal which is used in a number of applications including

glavanising, oxides, die castings and alloys.

We produce zinc in a variety of grades

Special High Grade (SHG)

High Grade (HG)

Prime Western (PW)

Our Special High Grade zinc products are LME registered productsunder the brand names

HZL SHG 99.995

Vedanta SHG 99.995

Special high grade and high grade zinc are available in standard ingots of 25 kgs and Jumboingots of 1,000 kgs each.. Prime Western is also available in the standard ingots form of 25kgs.

APPLICATIONS OF ZINC:

Over 11 million tonnes of zinc is produced annually worldwide. Around 48% of the

amount is used for galvanizing to protect steel from corrosion. Approximately 17% is

used the production of zinc base alloys like die castings etc. Nearly 10% of the zinc is also

utilized for compounds such as zinc oxide and zinc sulfate and about 11% is used in the

alloys especially brass.

GALVANIZING

Zinc is one of the best forms of protection against corrosion and is used extensively in

building, construction, infrastructure, household appliances, automobiles, steel furniture, and

more. Galvanising accounts for around 48% of global zinc usage.

ZINC OXIDE

The most widely used zinc compound, zinc oxide is used in the vulcanisation of rubber, as

well as in ceramics, paints, animal feed, pharmaceuticals, and several other products and

processes. A special grade of zinc oxide has long been used in photocopiers. 10% of global

zinc usage is in this segment.


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DIE CASTING

Zinc is an ideal material for die casting and is extensively used in hardware, electrical

equipments, automotive and electronic components. 17% of zinc used in the word is through

Die Castings.

ALLOY

Zinc is extensively used in making alloys, especially brass, which is an alloy of copper

and zinc. Alloy accounts for around 11% of global zinc usage.

ROLLED ZINC

Zinc sheets are used extensively in the building industry for roofing, flashing and

weathering applications. These are also used in graphic art to make plates and blocks, as

well as battery callouts and coinage.

LEAD

We produce refined lead at our Chanderiya Smelting Complex, which is LME registered

under the brand name of "Vedanta 99.99

Lead metal is used in a number of applications including battery segment, lead-basedpigments, and cathode ray tubes. Our refined lead metal is available in standard 24 kgsingots.

APPLICATIONS OF LEAD:

The battery sector is the single largest consumer of lead, accounting for around three-quarters of the demand. It can be sub-divided into the following groups:

SLI (Starting-Lighting-Ignition) batteries, which currently accounts for around half of the

total lead demand. These are mainly used in cars and light vehicles, but are also found in

other applications such as golf carts and boats. SLI battery demand in turn can be split into

original equipment and replacement, with replacement demand outstripping original

equipment demand by about 4:1 in mature markets.

Industrial batteries, which currently consumes around a quarter of the total lead produced.

This sector can be split roughly 50:50 into stationary and traction batteries. Stationary batteries are

principally used in back up power supply systems; traction batteries are used for motive power in

equipment such as forklift trucks and motorised wheelchairs.

The remainder is used in non-battery applications. The second largest current end use of lead for

non- batteryapplications, accounting for around 8% of lead consumption, is the chemical

industry, in the form of lead-based pigments and other compounds. Principal markets are for

cathode ray tubes used in television screens and computer monitors, and for Poly Vinyl Chloride


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(PVC) stabilisers

SILVER

We are India's largest and one of the world's leading primary silver producer. We

produce refined silver at Chanderiya Smelting Complex; it is recovered as a byproduct

of lead metal.

We produce high quality silver bullion having a minimum purity of 98.5% to 99.5% of

silver; it is casted in the form of bricks weighing 30 kgs.

APPLICATIONS OF SILVER:

Silver is used in a number of varied applications like the most important uses of silver

being the industrial and decorative uses, photography, and jewelry & silverware;

together, these three categories represent more than 95 percent of annual silver

consumption. Silver's unique properties restrict its substitution in most applications.

Industrial applications:

brazing alloys, electrical contacts, high capacity silver-zinc or silver-cadmium

batteries, printed circuits and other electronic applications.

Other applications:

Silverware, jewellery, Silver plating, photography, Dentalalloys and more.

CADMIUM :

We are India's largest cadmium producer. We recover cadmium from our zinc smelting

process as cadmium is mainly found in association with zinc ores.

We produce high quality cadmium pencils having a minimum purity of 99.95%

to 99.99% of cadmium; it is casted in the form of pencils weighing from 250 gms to

500 gms.

APPLICATIONS OF CADMIUM: The single most important use of cadmium is in theproduction of nickel-cadmium ("Ni-Cad") batteries. About three quarters of the

cadmium consumed annually is used to make batteries. Cadmium is also useful in a

number of other applications as paint pigments, low-temperature melting alloys, etc.


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PLANNED PROJECTS:

In order to accomplish the mission of producing one million tonnes of metal by 2010,

we have announced new projects (Phase III), post completion of which, we will become

the largest integrated Zinc-Lead producer in the world having Zinc & Lead metal

production capacity of 1064,000 tonnes per annum.

210,000 tonnes per annum Hydrometallurgical Zinc Smelter at Rajpura Dariba

100,000 tonnes per annum Lead Smelter at Rajpura Dariba

Rampura Agucha Mine expansion from 5.00 million tonnes per annum to 6.00

million tonnes per annum

Sindesar Khurd Mine expansion from 0.30 million tonnes per annum to 1.50 milliontonnes per annum

Opening of a new mine at Kayar with an initial capacity of 0.30 million tonnes perannum.

2 x 80 MW Coal based Captive Power Plant at Rajpura Dariba Increase in silver production capacity from 150 tonnes per annum to 500 tonnes perannum.

Of the above projects, we have successfully commissioned the 210,000 tonnes per

annum Hydrometallurgical Zinc Smelter at Rajpura Dariba and the 1.00 million

tonnes per annum concentrator in Rampura Agucha, in March 2010. Our current metal

production capacity is 964,000 tonnes per annum (879,000 tonnes of zinc and 85,000

tonnes of lead). The ore production capacity currently stands at 8.40 million tonnes per

annum.


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CHAPTER -4


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PHYSICAL DISTRIBUTION

Supply chain is composed of a series of suppliers and customers linked together by a

physical distribution system.

Physical distribution is the movement of materials from the producer to the consumer. It is the

responsibility of the distribution department, which is part of an integrated materials management or

logistics system.

Physical distribution is the movement and storage of finished goods from the end of production to

the customer.

CHANNELS OF DISTRIBUTION

A channel of distribution is one or more companies or individuals who participate in the flow

of goods and/or services from the producer to the final user or consumer. Sometimes a companydelivers directly to the customers , but often it uses other companies or individuals to distribute

some or all of its products to the final consumer and are called intermediaries like wholesalers,

agents, transportation companies, and warehouses.

There are two channels involved

1. The transaction channel: concerned with transfer of ownership and its function is

to negotiate, sell, and contract.

2. The distribution channel: concerned with transfer or delivery of the goods or services.

One firms physical supply (movement and storage of goods from suppliers to manufacturing)is another firms physical distribution.

To extend markets requires a well-run distribution system.

The specific way in which materials move depends upon many factors. Theseare:

The channels of distribution that the firm is using.

The types of markets served.

The characteristics of the product. The type of transportation available to move the material.


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PHYSICAL DISTRIBUTION SYSTEM :

Physical distribution system is responsible for delivering to the customer what is wanted on time

and at minimum cost. The objective of Physical Distribution is to design and operate a distribution

system that attains the required level of customer service and does so at least cost.

In physical distribution there are certain activities that interact with each other which affect

customer service and cost of providing it. These are:

1. Transportation

2. Distribution inventory

3. Warehouses(distribution centers)

4. Materials handling

5. Protective packaging6. Order processing and communication

Global distribution:

It is the movement of goods to and from locations around the world. Global distribution is

a very small term but plays a very big role in an organization. It is affected by many factors.

Fluctuations in currencies can change costs dramatically and must be taken into account when

assessing the risks involved in deciding where to source goods.

Transportation:

Transportation is an essential ingredient in the economic development of any area. It brings

together raw materials for production of marketable commodities and distributes the products

of industry to the marketplace. The carriers of transportation can be divided into five basicmodes.

1. Rail

2. Road, including trucks, buses, and automobiles

3. Air

4. Water, including oceangoing, inland, and coastal ships

5. PipelinesEach mode has different cost and service characteristics that determine which method is

appropriate for the types of goods to be moved.

Any carrier whatever mode, must have certain basic elements like ways, terminals and

vehicles. Legal types of carriage:

Carriers are legally classified as public (for hire) or private (notfor hire).

Public carriers may carry goods for the public as a common carrier or under contract to a

specified shipper.


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Common carriers make a standing offer to serve the public. This means that whatever products

they offer to carry will be carried for anyone wanting their service. With some minor

exceptions, they can carry only those commodities they are licensed to carry. For instance, a

household mover cannot carry gravel or fresh vegetables.

Common carriers provide the following:

Service available to the public.

Service to designated points or in designated areas.

Scheduled service.

Service of a given class of movement or commodity

Contract carriers haul only for those with whom they have a specific formal contract of service, not thegeneral public. Contract carriers offer a service according to a contractual agreement signed with aspecific shipper. The contract specifies the character of the service, performance, and charges.

Private carriers

Private carriers own or lease their equipment and operate it themselves. A company normally

only considers operating its own fleet if the volume of transport is high enough to justify

the capital expense.

Transportation cost elements :

There are four basic cost elements in transportation. Knowledge of these costs enables a shiper

to get a better price by selecting the shipping mode. The four basic costs are as follows:

1. Line Haul

2. Pickup and delivery

3. Terminal handling

4. Billing and collecting

WAREHOUSING

Warehouses include plant warehouses, regional warehouse, and local warehouses. They

may be owned and operated by the supplier or intermediaries such as wholesalers, or they may

be public warehouses.

The service function that warehouses perform can be classified into twokinds :

1. The general warehouse where goods are stored for long periods and where the prime

purpose is to protect goods until they are needed. There is minimal handling, movement

and relationship to transportation.

2. The distribution warehouse has a dynamic purpose of movement and mixing. Goods are


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received in large-volume uniform lots, stored briefly, and then broken down into small

individual orders of different items required by the customer in the marketplace. The

emphasis is on movement and handling rather than on storage.

Roles of warehouses:

Warehouses serve three important roles: transportation consolidation, product mixing andservice.

Transportation consolidation : It is concerned with reduction of transportation costs. This can

be done by consolidating small(LTL) shipments into large (TL) shipments. In physical

distribution, TL shipments can be made to a distant warehouse and LTL shipments made to

local users. Transportation consolidation in physical distribution is sometimes called break-

bulk, which means the bulk (TL) shipments from factories to distribution centers are

divided into small shipments going to local markets.

Product mixing : It deals with the grouping of different items into an order and the

economies that warehouses can provide in doing this.

Service: distribution centers improve customer service by providing place utility.

Goods are positioned close to markets do the markets can be served more quickly.

PACKAGING:

The basic role of packaging in any industrial organization is to carry the goods safely through a

distribution system to the customer. The package must do the following:

Identify the product Contain and protect the product.

Contribute to physical distribution efficiency.

UnitizationUnitization is the consolidation of several units into large units, called unit loads, so there is

less handling. A unit load is a load made up of a number of items, or bulky material, arranged

or constrained so the mass can be picked up or moved as a single unit too large for manual

handling. Material handling costs decrease as the size of the unit load increases.

MATERIALS HANDLING :

Material handling is the short-distance movement that takes place in or around a building such

as a plant or distribution center. For a distribution center, this means the unloading and

loading of transport vehicles and the dispatch and recall of goods to and from storage. In

addition, the racking systems used in distribution centers are usually considered to be part of

material handling.


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Some objectives of materials handling are asfollows:

1. To increase cube utilizastion by using the height of the building and by reducing the need

for aisle space as much as possible.

2. To improve operating efficiency by reducing handling. Increasing the load per movewill result in fewer moves.

3. To improve the service level by increasing the speed of response to customerneeds.

There are many types of material handling equipment. For convenience, they can be

grouped into three categories: conveyers, industrial trucks, and cranes and hoists.


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CHAPTER - 5


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OBJECTIVES

TO UNDERSTAND HOW THE LEED IS GENERATED FOR

THE PRODUCT LIKE ZINC.

TO UNDERSTAND DIFFERENT TYPERS OF

TRANSPORTATION MODES ADOPTED BY THE COMPANY

(HINDUSTAN ZINC LIMITED).

TO UNDERSTAND THE REQUIREMENT OF ZINC INLARGE QUANTITIES BY MAJOR INDUSTRIES.

TO UNDERSTAND THE CHALLENGES WHICH ARE FACED

BY THE SALES PERSONNEL FOR SLLING THE PRODUCT

LIKE ZINC.

TO FIND OUT SALES PROFESSIONALS PERCEPTION

ABOUT THE MARKET OF ZINC.

TO UNDERSTAND THE VARIOUS BIPRODUCTS OF

HINDUSTAN ZINC LIMITED.

TO FIND OUT WHETHER COMPANY HAVE ANY

TRACKING SYSTEM TO TRACE THE PRODUCT WHILE

TRANSPORTING.


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CHAPTER-6


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WHAT IS RESEARCH?

RESEARCH IS THE COMMAN PARLANCE REFERS TO A SEARCH FOR THE KNOWLEDGE. ONE CAN ALSO

DEFINE RESEARCH AS SCIENTIFIC AND SYSTEMATIC SEARCH FOR THE PERTINENT INFORMATION ON A

SPECIFIC TOPIC. IT IS ACTUALLY A VOYAGE OF DISCOVERY.

IT IS AN ACADEMIC ACTIVITY WHICH COMOPRISES DEFINING AND REDEFINING PROBLEMS,

FORMULATING HYPOTHESIS OR SUGGESTING SOLUTIONS, COLLECTING, ORGANISING AND EVALUATING

DATA, MAKING DEDUCTIONS AND REACHING CONCLUSIONS AND AT LAST CAREFULLY TESTING

CONCLUSIONS TO DETRMINE WHETER THEY FIT THE FORMULATING HYPOTHESIS.

TYPES OF RESEARCH

DESCRIPTIVE RESEARCH MY RESEARCH IS BASED ON THE PHYSICAL DISTRIBUTION OF THE ZINC IN THE

DOMESTIC MARKET AND FACT FINDING ENQUIRIES AND GIVES A DESCRIPTION OF THE STATE OF

AFFAIRS AS IT EXIXTS AT PRESENT.

QUALITATIVE RESEARCH- THE OTHER FORM OF RESEARCH IS CONCERNED WITH QUALITATIVE

PHENOMENON I.E. PHENOMENON RELATING TO OT INVOLVING QUALITY OR KIND AS WE AREINTRESTED IN INVESTIGATING THE DISTRIBUTION OF THE PRODUCT IN THE MARKET AND ALSO THE

BEHAVIOUR OF THE SALES PERSON ABOUT THE SELLING OF THE PRODUCT LIKE ZINC.


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FORMULATING

RESEARCHPROBLEM

EXTENSIVE

LITRETURESURVEY

CHOOSE THE

RESEARCHDESIGN

DETERMINING

SAMPLING

DESIGN AND SIZE

DEFINE THE

SOURCE OF DATA

PROCESSING AND

ANALYZING THE

COLLECTED DATA

INTERPRETATION

OF DATA

PREPARING THE

RESEARCH

REPORT


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RESEARCH DESIGN:

This calls for developing the most efficient plan for gathering the necessary information, design a

research plan, design on data sources, research approaches, research instruments, sampling plan and

contact methods. A research design is the specification of the method and procedure for acquiring the

information needed. According to my research design I have performed the following steps in the

project.

Types of data

Primary data: The collected data is a fresh data and collected for the first time and thus happens to be

original in character hence it is primary data. Primary data is collected through survey method by

distributing. The questionnaire is carefully designed by taking into account the parameters of my study.

Secondary data: data wad collected from books, magazines, web sites, going through the records f the

organizations, etc. secondary data is the data that has been collected by an individual or someone else

for the purpose of other than those of our particular research study. Or in other words we can say thatsecondary data is that data used previously for the analysis and the results are undertaken for the next

process.

In my research the data was collected by both the methods primary as well as the secondary method.


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DATA COLLECTION

INTRODUCTIONThe instruments that are employed to collect new facts or to explore new fields are called tools. It is of

vital importance to select suitable instruments and tools. Different tools are used to collect different typesof data. The use of a particular research tool depends upon the type of research proposal. Theresearcher may use one or more of the tools in combination for this purpose. Such tools or methods ofdata collection include tests, interviews, questionnaire, observation etc.SIGNIFICANCEThe progress of any educational program very much depends upon well conduction research. Itpostulates sufficient, reliable and valid facts. Such facts are normally obtained through a systematicprocedure which involves various devices. Each research tool is appropriate in a given situation toaccomplish a specific purpose. These tools should be used together or in combination as theysupplement the work of each other.Jhon W. Best (1992, P.159) commented that like the tools in the carpenter box, each is appropriate in agiven situation, to accomplish a particular purpose. Each data collecting device has both merits andlimitations. However, for effective result each tool has its own significance. It must be used according to

the required situation.

TYPES OF RESEARCH TOOLS

There are varieties of tools of research used in collecting data .These include:

Tests

Questionnaires

Opinionative or attitude scale

Quantitative interviews

Qualitative interviews

Focus groups

ObservationsQuantitative observations

TESTS

TESTS

As data gathering devices, tests are among the most useful tools of educational research, for they

provide the data for most experimental and descriptive studies in education. The instruments have been

designed to describe and measure sample of aspects of human behavior. These instruments assess

variety of human abilities, potentials achievements and behavior tendencies. They possess different

degrees of validity reliability and applicability.

QUESTIONNAIRE

Questionnaire is a self report data collection instrument that each research participant fills out as part of a

research study. Researchers use questionnaire to obtain information about the thoughts, feelings,

attitudes beliefs, values, perceptions, personality and behavioral intentions of research participants.

According to John W. Best (1992) a questionnaire is used when factual information is desired, when

opinion rather than facts are desired, an opinionnaire or Attitude scale is used.


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INTERVIEW

The interview is in a sense, an oral questionnaire. Instead of writing the response, the subject or

interviewee gives the needed information verbally in a face to face relationship.

Interview that are done face to face are called in person interviews; interviews conducted over the

telephone are called telephone interviews.

FOCUS GROUPSA focus group is a type of group interview in which a moderator (working for the researcher) leads a

discussion with a small group of individuals (e.g., students, teachers, teenagers) to examine, in detail,

how the group members think and feel about a topic. It is called a focus group because the moderator

keeps the individuals in the group focused on the topic being discussed. The moderator generates group

discussion through the use of open ended questions, and he or she acts as a facilitator of group process.

Focus groups are used to collect qualitative data that are in the words of the group participants. A focus

group is composed of 6 to 12 participants who are purposively selected because they can provide the

kind of information of interest to the researcher. A focus group is usually homogeneous, (composed of

similar kinds of people) because the use of a homogeneous group promotes discussion.

The group moderator (The person leading the focus group discussion) must have good interpersonal

skills and he or she must know how to facilitate group discussion. He or she needs to get everyone

involved in discussing the researchers questions and not allow one or two people to dominate the

discussion.

OBSERVATION

The next method of data collection involves something that we do most of our waking hours: observe

things. Researchers are also observers of things in the world. In research, observation is defined as the

watching of behavioral patterns of people in certain situations to obtain information about the

phenomenon of interest. Observation is an important way of collecting information about people because

people do not always do what they say they do. It is a maxim in the social and behavioral sciences that

attitudes and behavior are not always congruent.

In my research project I have selected the questionnaire and the telephonic interview as the data

collection tool.

Sampling plan

A sampling plan is a detailed outline of which measurements will be taken at what times, on which

material, in what manner, and by whom. Sampling plans should be designed in such a way that the

resulting data will contain a representative sample of the parameters of interest and allow for all

questions, as stated in the goals, to be answered.

Sample size

10 sales persons

Sample area

Hindustan Zinc Limited (Sales department)


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REMARKS: It is very easy for the customers to contact the company for the

product as per there requirement. Company doesnt require approaching the

customer for the product.

What are the challenges sales personnel face towards the selling of product likeZinc?

From the research I found that there are so many different views about the challenges

regarding the selling of the industrial product like zinc.

Some of the sales person said that they do not have any challenges regarding the selling of zinc

because as per there thought zinc is an industrial product and only required by the industries so

they do not have to convince the customer about it like some other regular products like FMCG

and FMCD. That kind of product requires the convincing the customer for purchasing there

product.

On the other hand some of the sales people think that selling zinc is a challenging factor for

them because they do not have to sell this product in the local market like any retail market.

As per my knowledge zinc is that kind of product that cant be sold individually to an individual

customer. So it is like the challenge for the sales personnel.


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But on the other hand as the data says that Hindustan Zinc Ltd is the company which provides

70% or above the product to the whole country, is not having any challenges to provide the

product to the customers.

As per the results of the questionnaire sales person doesnt requires to convince the customer

for selling the product because the customer doesnt requires the product(zinc) on regular

basis. It is that kind of product that is required by the industries only.

On the part of industries as we know that all the industries purchase their product on bulk basis

to save money.

REMARKS: As per the analysis there is no need to convince the customer for purchasing the

product because as it is an industrial product it is not possible for the customer to purchase a

single commodity or if the industrial customer needs it than they have to adopt the processwhich is managed by the company.

How zinc is transported in the market?

The transportation of the zinc is generally performed by the trucks, trains, trailers it depends

upon that where the product is to be reached. The HZL customers are classified in four zones

i.e. north, west, south, east.

There are 10 ports of HZL from where distribution can take place.

North 3 ports

West 3 ports

South 3 ports

East one port.

Fixing a transporter and making a contract:

Every transporter has to sign a work order in which terms and conditions are written and issigned by both the parties i.e. HZL and transporter.

The various headings included in the work order given to transporters by HZL are1. SCOPE OF WORK2. WEIGHMENT3. PLACEMENT OF PARRALLEL CONTRACT4. ASSIGNING / SUBLETTING CONTRACT5. TENURE


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6. TERMINATION7. SECURITY DEPOSIT8. FREIGHT9. DIESEL ESCALTION10. PAYMENT TERMS11. SERVICE INSTRUCTIONS, FAILURE TO PLACE VEHICLES AND

PENALTY THEREOF

12. SAFETY OF MATERIALS13. TRANSIT TIME14. TRANSHIPMENT/ CLUBBING OF GOODS IN TRANSIT15. VEHICLE DETENTION CHARGES16. FAILURE/REFUSAL TO EXECUTE JOBS ASSIGNED/ ENTRUSTED17. SERVICE PROVIDER TO COMPLY ALL LAWS ETC18. FORCE MAJEURE19. ARBITATION20. JURISDICATION21. GOVERNING LAW

Annexure

Different location is having different rates for transportation based on their distance. This

annexure says the rates fixed by both transporter and HZL according to the contract.

It covers following points.

Destination

Approx distance (in kms.)

Transit days

Quantity/ indent (48 hrs) (MT) Freight in Rs./ MT

The days of delivery are different for different cities. The day for loading and

unloading is not included in these days. For different locations different transporters are used

and a minimum quantity is set. Now if the delivery by any transporter is not done at time as

stated in the WORKORDER then strict fine is taken from them which is as follows.

Late by 1 day :- 1000/-

Late by 2 day :- 2000/-

Late by 3 day :- 4000/-

Late by 4 day :- 8000/- Late by 5 day :- 15000/-

1 week time :- value of the good + 10 %

Because of these strict fine policy transporter always tries to deliver the product to the customer on time.


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Remarks: AS PER MY VIEWS ABOUT THE TRANSPORTATION OF THE PRODUCT BY THE

COMPANY IS PERFORMING BY TRACING ALL THEIR PRODUCTS WHILE TRANSPORTATION.

COMPANY IS USING THE BEST TECHNOLOGIES FOR TRACKING THEIR PRODUCTS IN THE

MARKET.

What are the byproducts off the company? Do you sell them?

Sliver

Cadmium

Lead

Sulphuric acid

These are the byproducts of the Hindustan Zinc limited which are generated through the

processing of the zinc by the raw material of zinc.

Lead:

They produce refined lead at chanderiya smelting complex, which is LME registered under the

brand name ofVEDANTA 99.99.

Lead metal is used in a number of application including battery segment, lead-based pigments,

and cathode rays tubes.

Silver:

They are Indias largest and one of the worlds leading primary silver producer. We produce

refined silver at Chanderiya Smelting Complex; it is recovered as a byproduct of lead metal.

Company produce high quality silver bullion having minimum purity of98.5% to 99.5% of silver,

it is castes in the form of bricks weighing 30kgs.

Cadmium:

They are Indias largest cadmium producer. They recover cadmium from their zinc smelting

process as cadmium is mainly found in association with zinc ores.

They produce high quality cadmium pencils having a minimum purity of99.95% to 99.99% of

cadmium; it is casted in the form of pencils weighing from 250gms to 500gms.


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CADMIUIM 99.95 CUTOMERS ARE AS FOLOWS

ASSOCIATED STABPLAST & CHEM.,

INDIA TRADE LINK PVT. LTD.

KRISHNA TRADING COMPANY,

LAXMI NARAYAN & SONS

MET TRADE (INDIA) LTD.

MILLENIUM METALS

NICHROME INDUSTRIES

R.S. METALS PVT. LTD.

RISE CHEMICAL INDUSTRIES

Sulphuric acid

Sulphuric acid is one of the major industrial raw materials. It is one of the key ingredients for

manufacturing single super phosphate (SSP) and also widely used in detergents, chemicals, steel

and other various industries.

SULPHURIC ACID MIN 98% CLEAR (GRADE A) CUSTOMERS

A. R. SULPHONATES PVT LTD,

AARTI DRUGS LTD

Advance Surfactants India Ltd

ALWAR ZILA DUDGH UTPADAK

ANMOL CHEMICALS

ANSHUL CHEMICALS

AONE CHEMICALS

AQUAGEL CHEMICALS PVT LTD,

ARIHANT DERERGENT PVT LTD Aromatics India Pvt Ltd

Bajaj Chemicals

Binani Cement Ltd.

BOHRA INDUSTRIES LTD.

CHEM MAG INDUSTRIES

CHEMIEORGANIC CHEMICAL (INDIA) P. L

CHURU ZILA SAHKARI DUGDH UTPADAK S.

D.J. DYE CHEM

D.J.Dye Chem

DEEP CHEM

DEEPAK ACID CHEMICALS INDUSTRIES

Devyani Phosphate Private Ltd

Evermag Industries

GAYATRI CHEMICALS,

Gujarat Fluro Chemicals Ltd

GUJARAT STATE FERTILIZERS &CHEMICAL

GUJRAT PAGUTHAN ENERGY COPORATION

HINDUSTAN CHEMICAL INDUSTRIES

INDIAN PHOSPHATE LIMITED


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Indian Phosphate Limited(Unit-2)

JAI JEEWAN CHEMICALS

JAIPUR ZILA DUGDH UTPADAK S.S. LTD

Jaydip Chemicals

JUBILANT ORGANOSYS LTD

KAY BEE ALUM

LAXMI AGRO INDUSTRIAL CONSULTANTS

LIBERTY PHOSPHATES LTD.(UDAIPUR)

LUNA CHEMICAL IND. PVT. LTD.

Lupin Limited

M/s Ideal Chemicals (I) Pvt. Ltd.

MADHU SILICA PVT LTD - UNIT- II

MADHU SILICA PVT LTD ( E.O.U.)

Madhu Silica Pvt Ltd, DU-III

MADHU SILICA PVT LTD.

MAHAVIR CHEM TECH ,

Mithila Drugs Pvt Ltd

MOTI CHEMICALS NEW INDIA ACID (BARODA) PVT LTD

NIKEN CHEMICALS CO.,

P.R. ENTERPRISES

Phosphate India Pvt Ltd

POOJA ENTERPRISES

PORWAL INSTRUMENTS&CHEM. P. LTD,

PREM SAKHI FERTILIZER LTD

RAJASTHAN STATE MINES & MIN.LT

RAMA PHOSPHATES LIMITED,

RELIANCE INDUSTRIES LTD,

ROSE ZINC LIMITED RSWM LTD

RUPALI CHEMICALS

S.K. CHEMICAL

SADHANA PHOSPHATE & CHEMICALS Ltd

Shiva Acid & Chemicals

SHREE CHEMICALS

SHRI KRISHNA DETCHEM (P) lTD.

SHRILAXMI CHEMICALS ,

SHRINATH CHEMICALS

SHUBHLAXMI CHEMICALS

SINGHVI CHEMICALS & MARBLES

SR. MANAGER(STORE) IFFCO LTD

SULUX PHOSPHATES,

Swastik Zinc P Ltd

THE DHARAMSI MORARJI CHEM.CO.

TRIPURA CHEMICALS,

TRUCHEM ENTERPRISES

UDAIPUR DUGDH UTPADAK S.S.LTD,

UNITED PHOSPHORUS LIMITED


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Vaishali Chemicals

VAPI ACID & CHEMICAL Co.

Vardhaman Pharma

WANKSON CHEMICALS INDUSTRIES LTD,

WEST INDIA CHMICALS

REMARKS: AS PER THE RESEARCH THERE ARE FOUR BYPRODUCTS OF THE

COMPANYFROM WHICH SAOME ARE FOR SELLING AND SOME ARE NOT.

What is Sales professional perception about the market of zinc?

Sales professional perceptions about the market of zinc are that the zinc is that product which is

used in different fields:

i. Galvanizing

ii. Zinc oxide

iii. Die castings

iv. Alloys

v. Rolled Zinc

As the industrial use is more it is estimated according to the sales professionals approx. 70% of

the zinc market is covered in India by the company also includes 10.4 million batteries per year,

2.2 billion pieces for dry cell batteries.

REMARK: As per the details we conclude that the demand of zinc is increased in last 5

years because of the termination of the Chinese company in Beijing. After that all the zinc

market was captured by the Hindustan zinc limited.


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Observations and findings of the Report

While perusing the report generation I observed some finding about the company:

The generation of the leed or we can say that the approaching to the customer company

doesnt do as such like the other products because this company has its own customer

approaching services. Here, customer reaches to the web site of the company then

register himself with his company because it is not possible for the individual to purchase

the product like zinc as it is an industrial product.

Once the customer is registered with the company through website or we can the

procedure of the company then all the main transections are performed online only.

On the other hand after performing all the formalities by the customer company startstransporting their product to the ultimate customer.

The transportation of the product is to be done by different modes like trucks and

railways. Because these are the best ways for transporting industrial product.

The transportation of the product should be done after the completion of the contract

which is to be made between the customer and the company.(see annexure)

It is also observed that zinc is that product which is generally purchased by the customer

on the large amount or we can purchase in bulk. Because this product cant be purchase

by the normal consumer as it is not required.

There are some major industries in the country which are purchasing the product in large

quantities from the HZL

o Because it is required in batteries

o Galvanizing

o Making alloys etc.

This is also observed that some of the sales person rates this as a challenge to sell the

product like zinc as it is a industrial product.

And on the other hand some of the sales person says that it is not a challenge to sale the

product as its industrial nature. After all they concluded that is it more easy to sale that

kind of product as they did not required to convince the customer.


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CONCLUSION OF THE REPORT

I T IS TO BE CONCLUDED THAT THE TRANSPORTATION OF THE

PRODUCT IS SECURY PERFORMES

SELL ING OF ZI NC IS LI TTLE CHALLENGING ASIT A INDUSTRIAL

PRODUCT, BUT WE CAN ALSO INCLUDE THAT AS I T I S A

INDUSTRIAL PRODUCTIT I S NOT A CHALLENGE TO SELL THI S

PRODUCT.

TRACKING SYSTEM OF THE COMPANY I S SECURE SO IT IS

SURED THAT THE CUSTOMERS WILL GET THERE PRODUCTSAFELY

THE BYPRODUCTS OF THE COMPANY ARE ALSO

Summer Internship Ram

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