A

PROJECT REPORT
ON

MARKETING & STRATEGIC PLANNING OF

SECONDARY PRODUCTS

AT
STEEL AUTHORITY OF INDIA LTD.
BHILAI STEEL PLANT.

SUBMITTED TO
UNIVERSITY OF PUNE

BY
KAMAL PATIL
MBA - II (2004-2006)
VISHWAKARMA INSTITUTE OF MANAGEMENT
PUNE - 411037

A
PROJECT REPORT
ON

MARKETING & STRATEGIC PLANNING OF

SECONDARY PRODUCTS

AT

STEEL AUTHORITY OF INDIA LTD.

BHILAI STEEL PLANT.

SUBMITTED TO
UNIVERSITY OF PUNE

BY
KAMAL PATIL
MBA - II (2004-2006)
 VISHWAKARMA INSTITUTE OF MANAGEMENT
PUNE - 411037

INTRODUCTION TO TOPIC

In today s competitive world where cutthroat competition exists, every

one wants to know their position, their strength and weaknesses. So it is very
essential to know opportunity to target the potential market, capture the
market, evaluate and form the marketing strategies. Marketing strategy is an
element of the overall strategy of organization. It is a way through which
companies achieve their goal, or in others words, it is the complete
unbeatable plan designed especially for attaining the marketing objective of
the firm. The marketing objective indicates what the firm wants to achieve.
The marketing strategy provides the path and design for achieving them.
They are normally arranged in accordance with the guidelines provided by
the company objective and company budgets.

Bhilai Steel Plant is the steel manufacturing plant. The main products
of plant are Rail Tracks, Billets, Blooms, Plates, Wire Rods, and Angles.
While the production of primary products there are generation of some by-
products or secondary products. These secondary products also sold in the
market and make a huge amount of revenue. The quantity of these materials
is very high therefore it needs totally different marketing strategy to sell in
the market.

This project was basically concerned to the Marketing & Strategic

Planning of Secondary Product and collecting view of customer of
secondary product, like problems face by them while purchasing these
product, what are there expectation from Marketing Department. Overall, this
project suggests in the improvement of the existing marketing strategy of
secondary product and helps in eliminating the flaws in sale policy of Bhilai
Steel Plant.

CERTIFICATE

This is to certify that this project titled Marketing & Strategic

Planning of Secondary Products at Bhilai steel plant, SAIL is a
bonafide work carried out by Kamal Patil of MBA-II of Vishwakarma
Institute of Management for fulfillment of MBA degree of University of
Pune.

He has worked under our guidance and direction. His work is found
to be satisfactory and complete in all respect.

Prof. S. L. Joshi Prof. Rajesh Vhatkar

(Director) (Project Guide)

Date: Date:

Place: VIM, Pune Place: VIM, Pune

 COMPANY PROFILE

Steel Authority of India Limited (SAIL) is the leading steel-

making company in India. It is a fully integrated iron and steel
maker, producing both basic and special steels for domestic
construction, engineering, power, railway, automotive and defense
industries and for sale in export markets.
Ranked amongst the top ten public sector companies in India
in terms of turnover, SAIL manufactures and sells a broad range of
steel products, including hot and cold rolled sheets and coils,
galvanized sheets, electrical sheets, structural, railway products,
plates, bars and rods, stainless steel and other alloy steels. SAIL
produces iron and steel at four integrated plants and three special
steel plants, located principally in the eastern and central regions of
India and situated close to domestic sources of raw materials,
including the Company's iron ore, limestone and dolomite mines.
SAIL's wide range of long and flat steel products are much in
demand in the domestic as well as the international market. This
vital responsibility is carried out by SAIL's own Central Marketing
Organization (CMO) and the International Trade Division. CMO
encompasses a wide network of 38 branch offices and 47 stockyards
located in major cities and towns throughout India.
With technical and managerial expertise and know-how in
steel making gained over four decades, SAIL's Consultancy
Division (SAILCON) at New Delhi offers services and consultancy
to clients world-wide.
SAIL has a well-equipped Research and Development Centre
for Iron and Steel (RDCIS) at Ranchi which helps to produce
quality steel and develop new technologies for the steel industry.
 Besides, SAIL has its own in-house Centre for Engineering
and Technology (CET), Management Training Institute (MTI) and
Safety Organization at Ranchi. Our captive mines are under the
control of the Raw Materials Division in Calcutta. The Environment
Management Division and Growth Division of SAIL operate from
their headquarters in Calcutta. Almost all our plants and major units
are ISO Certified.

Integrated Steel Plants

Bhilai Steel Plant (BSP) in Chhattisgarh

Durgapur Steel Plant (DSP) in West Bengal
Rourkela Steel Plant (RSP) in Orissa
Bokaro Steel Plant (BSL) in Jharkhand

Special Steel Plants

Alloy Steels Plants (ASP) in West Bengal

Salem Steel Plant (SSP) in Tamil Nadu
Visvesvaraya Iron and Steel Plant (VISL) in Karnataka

Subsidiaries

Indian Iron and Steel Company (IISCO) in West Bengal

Maharashtra Elektrosmelt Limited (MEL) in Maharashtra
Bhilai Oxygen Limited (BOL) in New Delhi
Joint Venture
SAIL has promoted joint ventures in different areas ranging
from power plants to e-commerce.

NTPC SAIL Power Company Pvt. Ltd

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

Bokaro Power Supply Company Pvt. Limited

This 50:50 joint venture between SAIL and the Damodar Valley
Corporation formed in January 2002, is managing the 302 MW
power generation and 1880 tones per hour steam generation
facilities at Bokaro Steel Plant.

Bhilai Electric Supply Company Pvt. Limited

Another SAIL-NTPC joint venture on 50:50 basis formed in
March 2002 manages the 74 MW Power Plant-II of Bhilai Steel
Plant which has additional capacity of producing 150 tones of
steam per hour.

UEC SAIL Information Technology Limited

This 40:60 joint venture between SAIL and USX Engineers &
Consultants, a subsidiary of the US Steel Corporation, promotes
information technology in the steel sector.
 Metaljunction.com Private Limited
A joint venture between SAIL and Tata Steel on 50:50 basis, this
company promotes e-commerce activities in steel and related
areas.

SAIL- Bansal Service Center Pvt. Ltd.

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

North Bengal Dolomite Limited

A joint venture between SAIL and West Bengal Mineral
Development Corporation ltd on 50:50 basis was formed for
development of Jayanti Dolomite Deposit, Jalpaiguri for supply
of Dolomite to DSP and other plants.

Romelt-SAIL (India) Ltd

A joint venture between SAIL, National Mineral Development
Corporation (NMDC) and Russian promoters for marketing
Romelt Technology developed by Russia for reducing of iron
bearing materials, which is carried out with carbon in single
stage reactor with the use of oxygen.

Ownership and Management

The Government of India owns about 86% of SAIL's equity and

retains voting control of the Company. However, SAIL, by virtue of
its "Navratna" status, enjoys significant operational and financial
autonomy.
 BACKGROUND & HISTORY OF SAIL

A Rich Heritage

The Precursor

SAIL traces its origin to the formative years of an emerging

nation - India. After independence the builders of modern India
worked with a vision - to lay the infrastructure for rapid
industrialization of the country. The steel sector was to propel
the economic growth. Hindustan Steel Private Limited was set up
on January 19, 1954. The President of India held the shares of
the company on behalf of the people of India.

Expanding Horizon (1959-1973)

Hindustan Steel Ltd. (HSL) was initially designed to manage

only one plant that was coming up at Rourkela. For Bhilai and
Durgapur Steel Plants, the preliminary work was done by the
Iron and Steel Ministry. From April 1957, the supervision and
control of these two steel plants were also transferred to
Hindustan Steel. The registered office was originally in New
Delhi. It moved to Calcutta in July 1956 and ultimately to
Ranchi in December 1959.

A new steel company, Bokaro Steel Limited, was incorporated in

January 1964 to construct and operate the steel plant at Bokaro.
The 1 MT phases of Bhilai and Rourkela Steel Plants were
completed by the end of December 1961. The 1 MT phase of
Durgapur Steel Plant was completed in January 1962 after
commissioning of the Wheel and Axle plant. The crude steel
production of HSL went up from .158 MT (1959-60) to 1.6 MT.
The second phase of Bhilai Steel Plant was completed in
September 1967 after commissioning of the Wire Rod Mill. The
last unit of the 1.8 MT phase of Rourkela - the Tandem Mill -
was commissioned in February 1968, and the 1.6 MT stage of
Durgapur Steel Plant was completed in August 1969 after
commissioning of the Furnace in SMS. Thus, with the
completion of the 2.5 MT stage at Bhilai, 1.8 MT at Rourkela
and 1.6 MT at Durgapur, the total crude steel production
capacity of HSL was raised to 3.7 MT in 1968-69 and
subsequently to 4MT in 1972-73.

Holding Company

The Ministry of Steel and Mines drafted a policy statement to

evolve a new model for managing industry. The policy statement
was presented to the Parliament on December 2, 1972. On this
basis the concept of creating a holding company to manage
inputs and outputs under one umbrella was mooted. This led to
the formation of Steel Authority of India Ltd. The company,
incorporated on January 24, 1973 with an authorized capital of
Rs. 2000 crore, was made responsible for managing five
integrated steel plants at Bhilai, Bokaro, Durgapur, Rourkela and
Burnpur, the Alloy Steel Plant and the Salem Steel Plant. In
1978 SAIL was restructured as an operating company.

Since its inception, SAIL has been instrumental in laying a

sound infrastructure for the industrial development of the
country. Besides, it has immensely contributed to the
development of technical and managerial expertise. It has
triggered the secondary and tertiary waves of economic growth
by continuously providing the inputs for the consuming industry.

The New Millennium

SAIL today is one of the largest industrial entities in India. Its

strength has been the diversified range of quality steel products
catering to the domestic, as well as the export markets and a
large pool of technical and professional expertise.

Having achieved the initial goal of laying the foundation for the
industrial development of the country, SAIL took up the new
challenge of facing the era of liberalized economy and the
emerging competitive scenario in the Steel market. On the eve of
entering the new millennium, SAIL launched its Financial and
Business restructuring programme. The strategy includes a
divestment of non-core activities, restructuring of marketing
function and a focus on pruning cost of operation. The goal for
the company is to emerge as one of the lowest cost producer in
the global steel market.
PLANT WISE

Bhilai Steel Plant Blooms, Billets and Slabs beams

Channels, Angles
Crane Rails
Plate
Rails
Pig Iron, Chemicals and Fertilizers
Bokaro Steel Plant HR Coils and Sheets
Plates
CR Coils and Sheets
GP Sheets and Coils \ GC Sheets
Pig Iron, Chemicals and Fertilizers
Durgapur Steel plant Blooms, Billets and Slabs beams
Joists, Channels, Angles
Bars, Rods and Rebar s
Skelp
Wheels, Axel, Wheel Sets
Pig Iron, Chemicals and Fertilizers
Rourkela Steel Plant HR Coils
Plates
CR Coils and Sheets
GP Sheets\ GC Sheets
Tinplates
Electrical Steels
Pipes
Pig Iron, Chemicals and Fertilizers
 PRODUCTS

Product type wise

Semis Blooms, Billets and Slabs

Long Products Structural, Crane Rails, Bars,
Rods And Rebar s, Wire Rods
Flat Products HR Coils, Sheets and Scalp Plates

CR Coils and Sheets

GC Sheets\GP Sheets and Coils

Tinplates, Electrical Steel

Tabular Products Pipes

Railways Products Rails Wheels, Axels, Wheel sets

THE SEVEN C S OF SAIL

Consistent Quality
Committed Delivery
Customized Products
Competitive Prices
Complaint Settlement
Contemporary Products
Culture of Customer Services
 CONTENTS

TITLE PAGE

EXECUTIVE SUMMARY 01-02

INTRODUCTION TO TOPIC 03-03

COMPANY PROFILE 04-21

SCOPE OF WORK 22-22

OBJECTIVE OF PROJECT WORK 23-23

RESEARCH METHODOLOGY 24-24

INFORMATION & ANALYSIS 25-34

OBSERVATION & FINDINGS 35-53

LIMITATIONS 54-54

CONCLUSION 55-56

SUGGETION 57-58

BIBLIOGRAPHY 59-59

ANNEXURE 60-67
INTRO DUC TIO N TO TO PIC
EXEC UTIV E SUM M ARY
C O M PANY PRO FILE
SC O PE O F WO RK
O BJEC TIV E O F PRO JEC T
INFO RM ATIO N & ANALYSIS
O BSERV ATIO N & FINDING S
LIM ITATIO NS
C O NC LUSIO N
RESEARC H M ETHO DO LO G Y
ANNEXURE
SUG G ETIO N
BIBLIO G RAPHY
 EXECUTIVE SUMMARY

Progress is a continuous process. It is relative and absolute. We can t stop

at a certain destination and declare that target has achieved and we need
not go further.

The summer training programs are designed to give the manager of the
future, a feel of the corporate happening and work culture. These real life
situations are entirely different from the simulation exercise enacted in an
artificial environment in side the classroom and it is precisely because of this
reason that this summer training is a bridge between the institute and
organization. Summer training program made us to understand how
theoretical knowledge will be applied in practical field.

It exactly in this context that I was privileged enough to join Bhilai

Steel Plant, on 30 t h of May 2005, as a summer trainee. STEEL
AUTHORITY OF INDIA (SAIL) is ranked among the top ten public sector
companies in India in terms of turnover. Bhilai Steel Plant is one of steel
plants comes under SAIL. It is symbol of Indo Soviet Techno Economic
collaboration, is one of the first three integrated steel plant set by the
Government of India. It is also the known for its enlightened and
progressive approach in steel making.

The experience that I have gathered over past eight weeks has
certainly provided me with an orientation, which I believe, will help me,
shoulder any assignment successfully in future.
 In today s market where the customers are playing a major role and
it s extremely necessary for an organization to see that their product
provides complete satisfaction to their customer by fulfilling their needs.
During this project I study the marketing strategy of secondary products
of Bhilai Steel Plant. I was out for customer survey, to know the problem
facing by customers in local region. Also I tried to find out some different
marketing tactics and procedures, which will helpful for Management and
customer, both.

All the information is not only collected by survey and work visit
but also by discussing with different managers in marketing department of
Bhilai Steel Plant. Also I have used all the relevant data which were
available in Bhilai Steel Plant.

The rest of the report was done after a deep comprehensive and full-
fledged study of the problem and is based on my original research and
investigation.
 INTRODUCTION OF BHILAI
STEEL PLANT

INTORDUCTION

The Bhilai steel plant was described by Late Mr. J L Nehru jewel
in the crown of sail . For production of steel an MOU (memorandum of
understanding) was signed with the Russian government for setting up of
the Bhilai steel plant. The first phase of 1 MT was completed in 1959 and
subsequently capacity was expanded to 2.5 MT and 4 MT.
Five time winner of prime minister s trophy for best integrated steel
plant in the country, Bhilai steel plant (BSP) is India s sole producer of
rails and heavy steel plates and major producer of structural. With an
annul production capacity of 3.153 mt of saleable steel, the plant also
specialized in other products such as wire rods and merchant products. All
saleable products of Bhilai steel plant are under the ISO umbrella as per
BSP s accreditation with ISO 9001:2000 quality management system
standard. Plant s plate mill, Dalli merchandized mines and rail mill have
also received ISO: 14001 certificates for their environment management
system.

PLANT LAYOUT

An the unit of the plant have been laid in sequential formation

according to technological interrelationship, so as to ensure uninterrupted
flow of in process material like coke, slag etc and to minimize the length
of various inter plant connection utilities and services.
RAW MATERIALS

BSP is primarily an ore based plant. The requirement of principal of

raw material except coal and manganese ore is met from the captive mines
of the plant. The plant owns and manages the mechanized and manual iron
ore mines, at Dalli rajhara situated about 100 km away from Bhilai and a
lime stone mine at nandini about 25 km away from plant. The plant also
owns quarries or hirri, Chhattisgarh (for dolo-mite),
Over a million tones of minerals of mined annually from the captive
mines.

SERVICES AND UTILITIES

BSP is an integrated steel plant which requires various forms of

energy like electricity, fuel (solid, liquid and gaseous), stream, oxygen,
compressed air, chilled water, air blast etc.
Electricity power is supplied by BESCL (Bhilai electric supply
company limited) a joint venture between National Thermal Power
Corporation and SAIL from korba 250 km away from Bhilai.
Water supply comes from a well constructed system of water works
of the state government tandula reservoirs, water from nearby rivers are
brought to two huge water reservoirs ( maroda tank 1 & 2) through a well
laid canal, 60 km long from BSP.
The other utility like gaseous liquid and solid fuels, chilled water,
steam, oxygen and compressed air are provided at plant by centralized
utility services.
There exist an extensive communication system at work at work
place which include an auto telephone exchange, dispatch communication
system, gas and fire alarm signal, yard communication and automatic
 signaling and blocking system of plant, rail transport facility and
shop floor loud speaker system.

MANAGEMENT

Initially BSP was under the administrative control of the ministry

of iron and steel with powers delegated to the chief of the plant. Later
Hindustan steel ltd. controlled the management which was formed in 19 t h
January, 1954 to manage Rourkela steel plant. Bhilai steel plant becomes
the constituent of Hindustan steel ltd. With the formation of steel
authority of India limited on 24 t h January, 1973.
In the organization of BSP, the managing director is the top most
authority responsible for overall control. There are two executives
directors one is for project and another is for works, with five general
managers. They are in following manner:

General Manager - In charge of work

General Manager - Project
General Manager - In charge of work
General Manager - Finance
General Manager - Mines

They have under them Deputy General Manager, Astt. General

Manager, General Manager, Sr. Manager and Manager. Executive Director
has the most important function of the second rung, in the view of the fact
that he is in the entire charge of the plant and is directly responsible for
production. The Executive Director (project) has the responsibility for all
expansion and constructive activities.
 General Manager (Marketing Management) has the sole authority of
all purchases, stores, inspection, disposal and connected activities.
General Manager (Finance) is directly responsible for efficient
management of monitory resources, accounting and internal audit.

THE QUALITY POLICY OF BSP

Adherence to a quality assurance management system.

Action of improvement of all concerned.

Adequate upgradation of knowledge and skill.

Achieving customer satisfaction if quality and schedule.

PRODUCT MIX OF BHILAI STEEL PLANT

Steel from BSP have always played a prominent role in functioning

of ideal engineering industries, small scale steel maker, roller, foundries
and forged shops, large scale fabrications, builders, the construction
industries and Railways.

BSP is putting on the market a wide range of rolled products and in

some of the products enjoys the status of monopoly. Bhilai has all along
maintained its position as the most productive of India s integrated steel
plants. Its different product-mix is as follows.
PRODUCT-MIX OF BSP :

Billets/Blooms (MM) 90, 100, 110, 150,

280,320

Slabs (MM) 195x1300, 195x1500

245x1500, 195x1250,
320x1500

Narrow Slabs (MM) 200x250/320/410,

205x325/405

Rails 45 Kg/m, 52 Kg/m,

60 Kg/m

Crossing Sleeper Bars For Broad Gauge

Angles (MM) 50x50x5/6,

65x65x5/6/8/10,
75x75x5/6/8/10,
200x200x16/20/24

Channels (MM) 75x40, 100x50,

250x82,300x90,
400x100

Rounds (MM) 28, 32, 33, 36, 40,

42, 45, 47, 50, 53,
56, 60, 63, 67
Ribbed/ TOR Steel Bars 28, 32, 36, 40

Wire Rods

1. Plane coils 5.5, 6, 7, 8, 10

2. TMT coils 8, 10, 12

Flats (MM) Width: 50 -120

Thick: 8 - 20

Plates (MM) Width: 900-3200

Thick: 7.1 to 120

Pig Iron Various foundry & Basic

Grades.
BY PRODUCTS

Coke (MM) 0-10, 10-25, 0-25 & +25

Tar & Tar products HP Napthalens, Pitch

creosote oil,
Dephenolised oil, Sodium
phenolate, Anthracene oil,
Drained naphthalene oil,
Crude anthracene, Light
oil

Processed Slag Granulated Slag, Slag

Aggregate

Benzol product benzene, Toulene,

Xylene, Solvent oil, Heavy
crude benzol.

Hammer Plates

Ammonium Sulphate
MAJOR LANDMARKS :

Signing agreement for setting up the Plant - Feb 2, 1955

Commencement of work at site - May 6, 1956

Commissioning of Coke Oven battery no 1 - Jan 31, 1959

Commissioning of Blast Furnace no 1 - Feb 4, 1959

Commissioning of Power Plant no 1 - June 4, 1959

Commissioning of Steel Melting Shop no 1 - Oct 11, 1959

Commissioning of Blooming Mill 1150 stand - Nov 12, 1959

Commissioning of Billet Mill - Dec 24, 1959

Commissioning of Rail & Structural Mill - Oct 27, 1960

Commissioning of Merchant Mill - Feb 2, 1961

Commissioning of Sintering Plant no 1 - July 3, 1961

Commissioning of Wire Rod Mill - Sep 1, 1967

Commissioning of Plate Mill - Mar 31, 1983

Commissioning of Converter no 1 - July 29, 1984

Commissioning of continuous Casting shop 1 - Mar 15, 1986

Commissioning of SMS First Turn Hearth - Sep 12, 1986

Commissioning of Blast Furnace no 7 - Aug 30, 1987

Commissioning of Coke Oven Battery no 9 - Mar 31 1988

Commissioning of Second Twin Hearth - jan1, 1990

Commissioning of Third Rwin Hearth - June 29, 1992

AWARDS:

National Energy Conservation Award 99 from Honorable Minister of

Power, Mr. S. Prabhu.

Best Pollution Control Implementation Gold Award Institute of Lal

Bahadur Shastri Memorial National Awards for excellence industries.

Best Performance Award to Dalli Mechanized Mines.

PM s Shram Vir Award 2000 to Shri J. S. William, Sr. operator, CCS,

by Hon ble Prime Minister on 4-02-02 at New Delhi.

PM s Shram Bhushan Award 2001 to a group of 5 employees from

Blast Furnace.

Vishwakarma Rastriya Purashkar 99 to employees of the plant on 17 t h

Sep 2001.

Prime Minister Trophy Best Integrated Steel Plant Award

1992-93
1993-94
1995-96
1996-97
1997-98

National Level Coal India Productivity Award to Shri Hemant Kumar

Desai, Additional Chief Industrial Engineer.

4 Collective & 7 Individual Awards for the year 1999 to BSP on Safety,
Health and environment in Steel Industry.
 SCOPE OF WORK

This project is dealing with one of the largest steel plant in India.
Although it only concern with marketing department of Bhilai Steel Plant
but it s itself a big opportunity for anyone to cover the every single
corner of marketing department because Bhilai Steel Plant has vast
number of employees, working in marketing department. The scope of this
project is not only concentrated on marketing department of Bhilai Steel
Plant but also deal with its existing industrial customers.

SCOPE OF WORK:

MARKETING DEPARTMENT OF BHILAI STEEL PLANT

15 EXISTING INDUSTRIAL CUSTOMERS

WORK VISIT NOTES OF BHILAI STEEL PLANT

 ACKNOWLEDGEMENT

I take this opportunity to thank all those individuals and groups

without whose support this project could never have been completed.

I would like to thank our Honorable Director Mr. S. L. Joshi and

project guide Prof. Mr. Rajesh Vhatkar who gave me this opportunity.

My special thanks to Mr. D. S. CHAWLA (Sr. Manager, Marketing

& SP, BSP) and Mr. AYAN MISHARA (Manager, Secondary Product,
BSP) without whom this project could never have been completed.

This acknowledgement can never be completed without thanking to

the employees of Marketing & Strategic Planning department of Bhilai
Steel Plant and all other people who have been associated directly or
indirectly with my project and helped me in getting it in the present form.

DATE: Mr. Kamal Patil

 OBJECTIVE OF PROJECT

The objective of this project is to analyze the working condition in

a government organization. Apart from this, other major objectives are

To Analyses secondary products.

To understand Marketing strategy of secondary products.

To Know the Sales planning for secondary products.

To Know the Distribution methods of secondary products.

To Collect the Customers Feed Back.

 RESEARCH METHODOLOGY

BSP had a wide network within country. To analyze the

report certain methodology were used to elaborate the topic in easy way.
The design of a research study is based on the purpose of the study.
Methodologies which were used are:

SAMPLING
An integral component of a research design is the
sampling plan. Sample size, which was taken for the research, is six
departments in marketing branch of BSP.

STRUCTURED QUESTIONNAIRE
Structured questionnaire was prepared and survey
made with the customers of secondary product of BSP at local region.

FORMAL & INFORMAL INTERVIEW

Formal and Informal interviews were made with
the different managers of marketing department.

DATA COLLECTION
Various data are collected from different sources.
Sources of these data are various government publications, trade
journal, official website of SAIL, and various publication of BSP.
 MARKETING NETWORK

CENTRAL MARKETING ORGANISATION

Central Marketing Organization (CMO), one of the largest

marketing networks in the country, markets mild steel products from the
four integrated steel plant of SAIL. The CMO headquarter is at kolkata
and the commercial directorate is located at New Delhi. A nation-wide
network of regional offices, sales offices and several strategically placed
warehouses is further supplemented by consignment agents and authorized
dealers to meet the demands of the smallest customers in the remotest
corners of the country. CMO maintains its aggressive marketing efforts in
order to retain market leadership by meeting customer s requirements and
evolving strategies to increase sales. In order to strengthen the marketing
approach and initiate product and segment specialization, CMO has been
reorganized on the basis of long and flat products. Likewise, Key Account
Management process (KAM) has been implemented in CMO to provide
better service, quality and tailor made products to key Customer through a
single windows.
This is being followed by the Customer Satisfaction Index
(CSI) to increase responsiveness to customer needs. Yet another
significant development had been re-oriented of the sales braches and
warehouses. This will enable the marketing team to concentrate on
building customer relationship to provide them better service, along with
the best quality. Dealer development, especially in rural areas, is being
aggressively pursued by CMO to reach out to the farthest corners of the
country. This wide network of authorized dealers also helps meet
customers demand for steel in small quantities.
INTERNATIONAL TRADE DIVISION

International Trade Division (ITD) of CMO manages exports

of mild steel products and maintains close liaison with buyers abroad. ITD
has been successful in making SAIL steel, a familiar name across the
continents. Sail s reputation as a producer of quality steel products has
been established in as many as 70 countries around the globe. Notable
among them are JAPAN, EGYPT, UK, ITALY, RUSSIA, SRI LANKA,
BANGLADESH, TAIWAN, MYANMAR and NEPAL. Transport and
shipping division (T&S) of CMO performs the important functions of
ensuring proper dispatch of export material and timely import of raw
materials to keep SAIL plants going.

BRACH SALES OFFICE / SALES RESIDENT MANAGERS

This office is related to the sales of the prime products of the

Bhilai steel plant, which acts as an interfacing body between the BSP &
Centralized Marketing Organization (CMO). The different issues related
to the products and its delivery is dealt indirectly with BSP through this
department. We can say it coordinates about production and dispatch in
different Steel plants. CMO has got SRM offices at the following places
i.e. Bhilai, Rourkela, Bokaro, Durgapur.

FUNCTION OF BRACH SALES OFFICE (BSO)

Booking of order from customers on long term and short term basis.
Passing details of booking to concerned Sales Resident Managers
office.
The movement plan of the products which consist all the detail
related to the products quality, quantity and size are sent by this
office to the plant.
The meeting related to the sale of the product is done
intermittently.
The customer complaints are also handled by plant through this
branch sales office with proper channel of meeting.
SALES & DISTRIBUTION OF SECONDARY PRODUCTS

SELLING OF SECONDARY PRODUCTS:

This involves a direct marketing process. The management of
BSP in consultation with the officials of the market development and
customer service department works as group for the sale of these items.
There are 2 methods of selling these re-rollables defective materials.

BY FIXED PRICE SALE

BY TENDER
BY E-AUCTION

FIXED PRICE SALE

The re-rollable material is sold through marketing
department. The percentage of material to be sold by E-auction or by
marketing department depends upon the management decisions. There are
different re-rollables materials coming from four different mills that can
be sold. The pricing of these materials is carried out by the pricing
committee depending on:

The price offered by the customers during auction sale.

The quantity to be sold
The approval of the managing director.
The market price of the particular material.
The price offered by the competitors.
BY TENDER
The secondary product which are generated while process of
manufacturing the primary product is also sold by the tender option. In
this way of selling the secondary product, the marketing department of
secondary product releases the tender with number of quantity to be sold
and the minimum price can be offered and according to the application
which received against the tender notice, material sell to the particular
customer.

BY E-AUCTION
E-AUCTION is the internet based selling method of
secondary products. In this method, there is the online biding auction
done over the company s website. Applicants can offer their price money
with the particular quantity they want. Applicant can be anyone across the
country and can participate in the auction. After closing the date of
auction within 5 working days the final customer s name declared on the
website based on the price money offered by them. They are invited for
the further process of purchasing material.

PROCEDURE APPLIED FOR SALE OF SECONDARY

PRODUCTS

After obtaining approval of quantity and price for sale, Marketing

Department scrutinizes the demand from various parties, examine
the priorities and issue Offer Letters to respective parties. The
terms and conditions for sale are also enclosed with the Officer
Letter .
About one third of the actual quantity of material to be sold during
the year is offered to the actual users, subject to registration of
demand.
For the balance quantity to be sold at prices fixed by pricing
committee, preference is given to actual uses over traders. If their
giving preference to registered traders over others.
First preference is given to the actual users for allotment of scrap
against particular category of users; scrap processing units are
given second preference for such allotment.
The amount received from the party towards advance payment and
security deposited is forwarded for finance department by
marketing department after recording the details in the register.
Parties are allowed to visit the respective location/disposal sites
and inspect the scrap offered for sale.
Marketing department prepares sale order for the parties who have
accepted the offer. Sale orders are issued party wise and category
wise i.e. individual sale order covers such categories like CL scrap,
Rerollable, Sludge and waste products. The sale order is carried
over to the next year.
Based on the deposit made by the party, finance department
intimates to marketing department release of requisite scrap for
supply. Marketing department prepares release orders which are
treated by MRD as delivery order.
On receipt of release order, MRD plans number of trucks / trailors
to be entertained each day, after ascertaining quantum of different
types of scrap to be issued per day, number of trucks / trailors
expected loading and weight facilities available etc. MRD in
consultation with marketing intimates to the parties, likely date of
collection so as to deploy their fleet on the dates.
 Weight of each truck / trailors is taken before and after loading
under strict supervision.
Gate pass and other related documents are prepared by MRD to help
facilitate.

REFUND OF SECURITY DEPOSITES

Party has to give an application for closing or canceling sales order

to marketing department.
After receiving the application marketing department prepares
closing / cancellation order within three days of receipt of
application and issue to all concerned agencies.
Concerned department and Central Industrial Security Force (CISF)
issue No Due Certificate (NDC) and send to marketing department.
If NDC is not received in marketing department within 10 days, it
will be considered that the concerned department has no claim on
the party and marketing department takes further necessary steps
accordingly.
After receiving NDC from concerned departments, marketing
department issues letter of refund of security to finance department.
Finance department verify documents and ensure issue of cheques
to party against refund of security within 7 working days.

DISTRIBUTION OF SECONDARY PRODUCT

The current procedure being adopted by Bhilai Steel Plant for

the distribution of Re-rollables against the fixed price can be explained
as:
 Nearly 80% of the material available is offered to the actual
customers / re-rollers and 20% to scrap processors and others. However,
in the event of poor off take by re-roller / scrap processor, the surplus
available is offered to the traders as well but to a very limited extent. The
status of actual users/ re-rollers is decided on the basis of the necessary
certificate issued by the Director of Industries of the state. Whenever
there is surplus quantity available and the material is heterogeneous in
nature, the same is sold through auction / tender on all India bases
without making any distinction between the actual users and traders.
 MARKETING SCENARIO

Without a perfect market goods can neither be purchased nor

can it be sold. Marketing is one of the major and crucial department
pillars of every organization and it is the case with SAIL.

Customer Satisfaction and quality assurance , these are

the two motives of SAIL for achieving there goals and establishing there
market. SAIL has a wide network across the country. It is having it s
CMO for its marketing division. It s headquarter is situated in kolkata.

BHILAI STEEL PLANT is one of the most important

integrated steel plants of SAIL, which is earning profits for last 45 years.
It has established its position through a better service. BSP has several
departments among which marketing division play a key role. Every plant
has its own Branch Sales Officer (BSO) who looks upon the orders of
CMO. These orders are then sent to the plant for checking the availability
and production for dispatch. All departments are linked through
Management Information System (MIS) from CMO to each and every
division of plant.

The whole procedure of BSP for marketing is, customer send

their enquiries including their requirement to CMO who looks the orders
by order management system, which further send these requirement to the
regional office. Regional office sends the orders according to different
region to the BSO of each region. After checking of materials against
TDC booklets by the BSO and marketing division of plant it is send to the
customers according to the quantity demanded, with the same channel
through wagons and trucks as the case may be. The copies of invoice are
sent to the customers and regional office concerned which is ultimately
deposited in the bank to get payment in case of credit sale.
FOR MARKETING OF DIFFERENT ITEMS THE THREE TYPE
OF POLICY ADOPTED BY BSP ARE :

Memorandum of Understanding (MOU): it is an agreement signed

between the plant and customer foe assured quality and quantity.
Annual Booking Selling: it is an informal agreement where
customer assures the plant for purchase of certain amount
throughout year.
Spot Selling: in this case BSP release the tender and asks for
quotations to different customers.
 DIFFERENT SECTIONS OF BSP

DESCRIPTION OF 2.5 MILLION SECTION :

This section deals with the marketing procedure and functions

of non flatable products. These include Wire Rod Mill [WRM, merchant
Mill (MM)], Rail and Structure Mill (R & SM) and Billet and Blooming
Mill (BBM). This section is headed by senior manager and his
subordinates. This section has the job to look after all the stages of
marketing products.
This section has to play an important role in the overall
management procedure of marketing department. It is an integrated part of
the marketing department and contributes a lot to achieve the laid target
effectively.

WIRE ROD MILL:

This unit of Bhilai steel plant was commissioned on 1967

with a production capacity of 10,000 To 12,000 tones p.a. as later on it
had gone for expansion with most improve technology. Different
measurement of rods i.e. plain rods, rods coiled and of varying thickness
are produced in the Wire Rod Mill. The orders are placed in every three
months, semi-annually, quarterly or as per the demand of the customers
from CMO. On this basis the product are dispatched, if not fully met
revalidated to a further period and if fulfilled then new orders are
entertained.
MERCHANT MILL:

This unit of Bhilai Steel Plant was commissioned on 1961. By

1967 this unit was also undertaken for expansion with a target production
capacity to part with 2.5 MT section. Some of the product of this unit is
engaged with viz., Rounds, Channels, Angles, Ribbed Rods etc. some of
the major users are Indian Railways, Local Industrial Units, Heavy
Industrial Units and other concern. These products are mostly used while
rectifying the wear and tear of heavy equipments or construction of
structural in industries. The production quantity depends upon the orders
placed by CMO through DP (Dispatch Program) which displays the
allotment of different programs for each SAIL unit.

RAIL & STRUCTURAL MILL:

This giant unit of Bhilai Steel Plant was commissioned

in1961 with 50,000 tones capacity. Later on the expansion of this unit
gave an abundant production capacity of thousand tones of rails per
month. From the past many years Bhilai Steel Plant has been the major
supplier of rails, beams, channels and other heavy structural to the Indian
Railways, Export Industry and other heavy industrial units. Bhilai Rails
are in the great demand among south-east nations and middle-east
countries. They have achieved high laurels excellence internationally.
Since the ISO certification of Bhilai Plates, the future plans are to set up
the rails on the tracks for ISO standards.

DESCRIPTION OF 4.0 MILLION SECTION:

This section of Marketing Department deals with the
marketing procedures of flattable products. Flattable products viz., plates
of varied dimensions, the major functions of this section is performed by
CMO which assign the program to his section. The programs are assigned
bi-monthly, quarterly, half- yearly or annually according to the demand.
This section is a division of Marketing Department of BSP, it is headed by
Senior Manager and having a strength of 25-30 subordinates. Marketing
functions of both production units are looked after by this section. The
production units are :

STEEL MELTING SHOP - II (SMS - II)

From SMS II the required steel either mild or special as per

specifications required is supplied to Plate Mill. Hence forth there is a
close link between these two units. Any failure in the supply of steel to
Plate Mill will hamper the production of plates which is the major
contributor to the profits on sale.

STEEL MELTING SHOP - II (SMS - II)

This shop was commissioned on 1984 with a production

capacity of 4.0 mt steel, about 3.16 mt of saleable steel is extracted from
3.25 MT of ingot steel & the remaining as core and by products out of
these 3.16 MT of saleable steel some ratio quantity will be special steel
and the rest mild steel on treatment. Plates of different measurement as
per demand are produced from mild steel and special steel. Special steel
plates are mostly supplied to key customers and exported. Core materials
and by- products which can be used to produced other products are
supplied to concern production unit. Non-usable viz., Fly ash, Slag, Iron
Fillings etc. are dumped out and sold in the local market.
PLATE MILL

This shop was commissioned on with a production capacity of

approximately 4.0 MT plates per annum. This mill had brought high
laurels for Bhilai Steel Plant. With its maximum production capacity and
products of excellent quality it has earned ISO 9001-2000 certification.
This unit is among of the production departments in the BSP which has
fully computerized operations. Before the production of plates, it is
formed out of thick slabs which are produced with crude steel. The slabs
are exposed to necessary treatment of required composition, quality, and
dimension. Going through all these process, finished plates are finally
produced.

DESCRIPTION OF SECONDARY SALES SECTION

Secondary sales section started functioning after the

commissioning of Bhilai Steel Plant. This section controls the marketing
of core products and by- products. These products continuously evolve out
as no separate productions are made. Some of the by-products viz. slags;
fly ash, coke, iron scrap, steel scrap, iron fillings and cuttings etc. are
continuously produced out. The potential market is spread out in
Maharashtra, Andhra Pradesh, Madhya Pradesh and Chhattisgarh. This
section also functions a responsible role in selling out these by-products
in the ideal market and some far placed industries too. Some of the
potential buyers of these products are Cement Industry, chemical
Industry, Fertilizer Manufacturing units and some engineering and
Fabrication units. Some of the products are dumped in huge amount as
such this section holds auction sale for needy customers on spot prices.
There is good demand for coke among the other local industries, engaged
with production of industrial products including Railways.
 MARKETING DEPARTMENT

The marketing of prime products of all the steel plants of SAIL is

handled by the CMO (Central Marketing Organization). The marketing
department of BSP is entrusted with the job of co-ordination between the
CMO and the plants as well as the marketing of secondary products and
by products for ease of functioning; the department is divided into various
sections.

A. MARKETING AND STRATEGIC PLANNING

Handling of Customer Complaints: in case of any complaint

by customer. The complaint is sent to GM and the particular
mill. The CMO has an application engineer group for
commercial settlement which inspects the material and if
found defective; adjustments are made in the payments or the
material is taken back. If the quantity of goods is large, then
a plant also inspects the goods.

Customer Feedback : Customer feedback is taken by this

section on a periodic basis in the form of customer
satisfaction feedback reports. A four point feedback is taken
for increasing market share and for customer retention. The
basis pointers of the report are past performance, sector
growth, financial performance and purchases from other
suppliers of steel. For major customers, there is a Key
Accounts Manager , who handles them. This is done to
provide a single window service to these customers

ISO Activities: the various documents pertaining to ISO

activities are handled and managed here.
 Training: This section also overviews the training of new
recruits, summer trainees in the marketing department.

MIS reports

Product Development: The Management Research Group at

CMO (kolkata) studies the market demand and supplies,
feasibility for which is checked at the plant and furthered for
approval.

Strategic Planning : This section ascertains the product mix,

quantum of exports, monthly tonnage and other parameters
for the plant according to the demand.

Audit Applies : This division also coordinates the various

audits that are undertaken.

B. EXPORTS

The International Trade Division of CMO is the main body that

handles exports of steel in the SAIL. BSP has been a major exporter in
the past. Rails have been exported to over 50 countries. Currently,
plates constitute the major exports item. Some semi finished goods,
light structural and wire rods are also exported. The procedure of
exports is as follows :

The International buyer sends an enquiry to the ITD for the

availability of goods. This is sent to the plant for checking if
the asked grades and dimensions are feasible.
 If the response to the inquiry is positive then a letter of credit
is issued in the name of the buyer and a deal is signed
specifying all the terms and conditions.

The ITD gives a contract to BSP in the form of a work order

which is processed here and sent to the mills for production.

After production of goods a DISPATCH advice is sent to the

production department, after which the goods are certified
and tested. The goods are usually sent to Vizag for export.
The plant gets exemption from sales tax for goods meant for
exports.

At the port the various formalities are completed relating to :

i. Export license
ii. GR form
iii. Marine insurance
iv. Bill of loading (which gives possession of goods to the
shipping company).

After receipt of goods, payment is received through the bank.

The SAIL overseas account is at SBI kolkata.

COAL CHEMICALS

Ammonium sulphate
Benzol products
Crude tar and tar products
 Overall there are 18 major products of which 3
products i.e. DPO, DNP and HB are sold only to limited
customers.
Till 1999, the sale of coal chemicals was handled by
the CMO. The production of Benzol is 1000 tones while the
storage capacity is only 300 tones. Therefore for timely sale
of products, sale of coal chemicals are places under the
jurisdiction of the individual plants.

PROCEDURE OF SALE :

By February, the availability for the next financial year is

estimates.

A list of all the customers of coal chemicals is prepared and

the customers intimate the section about their requirements.

According to the requests submitted, the various customers

are told the quantities which will be provided to them.

To buy a product, a security has to be deposited.

The buyers arrange transport.

In case of low sales volumes, to ensure timely sale,

products are also sold through MOU. The advantages of
signing MOU are that the quantity of supply is assured and at
the end of the year a 1% discount is given on the total sale.
 Other methods used for sale are auctions (through
www.metaljunction.com) and tenders.

C. SECONDARY PRODUCTS AND BBM :

Some of the secondary products are BF slag, defective,

refractory bricks, flue dust, scrap rolls etc. the sale of secondary
products is done by floating tenders and forward auction. Due to
surplus capacity of blooms and billets, they are sold in the
market as semi finished products.

D. RSM, MM AND WRM :

All these mills are producers of prime products; therefore the

sale of these products is overseen by the CMO. The procedure for
booking of orders is as follows:

The customer contacts the nearest BSO office and place

orders.

The order is sent to the CMO which sends it to the plant for
checking availability and other parameters.

A contract is signed with the customer for the supply of

goods which gives all the details of the products, dimensions,
place and mode of dispatch etc.
 After the goods have been produced, they are transported to
the stockyard and the CMO asks the customer to collect the
goods after payment of the bills.

E. SALES RESIDENT MANAGER :

There are four SRM s located at the four integrated steel

plants. The SRM acts as an interface between the CMO and the steel
plant. The roles of the SRM are:

To check the availability of materials in the plant and to

oversee the increase in production.

To make the final rolling plan.

To dispatch materials as per orders

To prepare demand forecast every month.

 SECONDARY PRODUCT

IN BHILAI STEEL PLANT, THE FINISHED PRODUCTS ARE

CATEGORIZED IN TO THREE PART.

PRIME PRODUCTS:
These are actual products which are originally produced
for e.g. Blooms, channels, rounds, angles, TMT bars, wire rods, rails,
structure etc.

BY PRODUCTS:
These products are not originally produced by Bhilai Steel
Plant, but are the outcomes while producing the prime products.

SECONDARY PRODUCTS

This is the defective or rejected materials due to improper mixing

of chemicals components or fails to meet the optimum requirements.
Scrap generated inside Bhilai Steel Plant is termed as secondary products.
The secondary products use here is ferrous materials generated from
various production unit which can either suitably be used for remelting to
produce iron and products or offered for sale if rendered surplus in the
production process, for e.g. Defective Heavy Blooms, Defective Rails,
Rail cutting, Rod cutting, scrap etc.

DETAILS OF SECONDARY PRODUCTS:

Defective Heavy Blooms.

Defective Billet / Billet cutting.
Defective slabs.
Plate Mill side shearing.
Defective Rails.
Rail cutting.
Rod cutting.
Plate cutting.
Defective plates.
Rolled slab from Blooms.
Slags.
Coke fraction

COAL CHEMICALS.

Benzene.
Naphthalene.
Xylene.
Solvent oil.
Pitch.
Sodium Phenotate.
Wash oil.
Drained Naphthalene oil (DNO)
De penalized oil (DPS)
Heavy Benzol (HB)
Toluene.
Steel Bottom oil
- Light creosote oil
- Heavy creosote oil
- Antracence oil
 DETAILS OF SCRAP AND THEIR HANDLING

PCM SCRAP:
This is the scrap generated in the pig casting machine
and consists of splashing PCM runner, fires and weight range of up to
1.0 tone per piece.

BF RUNNER SCRAP:
Generated in blast furnace cast houses in the
form of runner jams etc. The maximum weight per piece is up to 2
tones. This scrap contains certain amount of slag.

UNPROCESSED STEEL SKULL SCRAP:

Generated in steel melting shops in slag cups and
metal ladles. As the skulls are quite broad in dimension, some of them
are required to be cut into sizes suitable for loading into trucks. These
skulls are in two weight ranges:
7 to 15 tones.
Above 15 tones.

SBIM SCRAP:
This consists of semi broken ingot mould and bottom
plate scrap and is in weight range of up to 2 tones per piece.

TURDISH SKULLS:
This is generated at bottom of turdish during pouring of
steel in continuous casting. The weight of skull varies 2 to 3 tones.
CAST CHILLS:
At continuous casting, in case of emergency, the extra
metal ladle is pour into containers and this is termed as cast chills. It is
rectangular in shape. The weight of each piece range from 7 to 25 tones.

CI SKULL SCRAP:
These are skulls generated in ladle repairs shop and blast
furnace processing Shop. The skull contains some slag. Bigger skull
require cutting for accommodating in trucks.

COBBLED SCRAP:
The cobbled scrap arises from wire rod mill and includes
some rejected coils and binding wires also.

REJECTED ROLLS:
Cast iron, rejected steel rolls.

MILL CUTTING:
Rail and structure mill cutting, Billet cutting, Bloom
cutting, Merchants mill cutting, Plate and shearing, rejected slabs cutting,
misrolled slabs, wire rod cutting are included in the type.

SECONDARY PRODUCTS CAN BE UTILIZED IN TWO WAYS:

By Re-rolling of secondary products.

By selling of secondary products.
BY RE-ROLLING OF SECONDARY PRODUCTS.

NAME OF THE MACHINERIES:

The steel Re-rolling mill requires the following machineries to
produce re-rollable materials from the mild steel scrap:

- Main motor connected with pulley and V- Delts.

- Fly- wheel as per the requirement and size of the mill.
- Pinion gear Box consisting of three gears.
- Five stands which are situated in the shed for rolling
of hot scrap up to the finished product.
- Furnace the size of the furnace varies from 30 ft. To
40 ft. in length, 6 ft. width and 8 ft. height with a
coal chambers or oil fired chamber.

MANPOWER REQUIREMENT:

- In each re-rolling mill a foreman is very necessary to

maintain the machines and to produce a good quality
product. To assist him there should one section man
and one fitter.
- Furnace requires one worker for pushing the material
inside the furnace two worker for pulling out the
rolls.
- From stand 1 to stand 5 nine worker are required for
pushing the metal in the rollers. They work for only
four hours out of eight hour. So about eighteen
workers are needed to work on one shift.
PROCESS OF MANUFACTURING:

The scrap for the re-rolling is generally from BSP railways.

These materials are not directly re-rollable so first it is required to make a
re-rollable and of proper size as per the requirement of the finished
products. In the recent years a number of foundries and re-rolling mills
came into existence throughout the country. These small scale sector need
the Secondary product as input, raw material for their production. The
company has engaged in educating them how to use secondary products
for different kind of end products for consumption. This material is then
continuously passed from one stand to other unit till finished product
comes out.
The rolls are provided with the groove as per the requirement of
the finished products.

PRODUCTS FOR THE RE-ROLLING MILLS

Over the year a number of re-rolling mills\ steel processing

mills and trading companies have come up in and around Bhilai. The raw
material need of these mills being met by the plant and the availability of
the re-rollable have increased the re-rolling mills to develop very fast.
The plant extends all type of facilities and assistance to these small scale
unites which in turn give scope for more employment.
M.S .Squares, Angles, Channels, Flats, Rounds, Z-Sections, U-
Sections, T-Sections.
Cold Twisted Deformed (C.I.D)
TOR Steel.
 Beams.

Strips.
Hoops.
Rectangular Bars.
Railway Sections.
Window Sections.
Pipes.

NECESSITY OF SELLING THE SECONDARY

PRODUCTS

The net sales realization from all the secondary products, by

products and co- products of Bhilai Steel Plant is around Rs. 600 crores
which Is quite more than many of the big industries. Out of which the
steel scrap arising itself bring about Rs.150-200 crores of money every
year. Re-production of main products these secondary products requires
remelting it again for the require composition of the materials as per the
desired specification.
By selling it to the different mill/ traders/ processors the plant gets
around Rs.4000 per tone of direct profit then by reproducing it to the
main product.
By using these materials traders/ processors/ re-rollers makes raw
materials for different finished product, which also making huge profit
and plant is not losing anything.
Profit is the aim of the every business, and when the re-utilization
of these products for the finished products proves to be cost lies, the
management plans to sell it to the local market.
SYSTEM OF REGISTRATION OF DEMAND IN BHILAI STEEL
PLANT

Marketing department of BSP sells homogeneous steel at fixed

price.

The procedure of registration is as follows.

Preference for sale of secondary products is given to local

parties. Secondary products are sold for trade.
Sale of material made to re-rolling mills and scrap processing
units.
For sale of secondary products offer letter is issued to
party offering quantity, formality is submission of DIC
Registration Certificate
Final allocation to the party is made on basis on their past
performance.
PROCESS FLOW CHART: BHILAI STEEL PLANT
 LIMITATION

There are certain limitations I had faced during my summer project,

which are

IT S VERY HARD TO TAKE APPOINTMENTS OF EVERY

MANAGER OF DIFFERENT DEPARTMENT DUE TO THEIR
BUSY SCHEDULE.

CUSTOMERS ARE SCATTERED OVER A LARGE AREA

THEREFORE HARD TO CONTACT.

CUSTOMERS ARE RELUCTANT TO PREVAIL THEIR

INTERNAL INFORMATIONS.
 CONCLUSION

BSP has faced large ups and downs in terms of their productivity
and profitability, in these 46 years. Its continuous improvement in terms
of quality is one of the flagships for the SAIL. Bhilai s contribution in
terms of materials, money and men has been commendable.
BSP has faced the problem of coal products in last year but still it
has maintained its productivity as per the plans and schedules. Believing,
the work to be completed with the help of teamwork. BSP has gained a
huge net profit of Rs. 2148 crore in the year 2004 -2005. Thanks to
modernization and maintenance that has changed the fortune of BSP.
With the new challenges, changing market and environment BSP has
sufficient capability to look further for the future to gain profits. It is
backed up by the chief asset and has a strong and capable team who has a
caliber to face any obstacles.
BSP has implemented numerous steps for strengthening its
fundamentals such as continuous cost reduction, technology improvement,
lowering borrowing level, persistent efforts to bring about a positive
attitude towards organizational goal among employees through planned
communication, training, optimum utilization of resources.
Commenting on the cost reduction strategy of the organization
Managing Director Mr. Rajendra Prasad Singh says, As the steel horizon
brighten up after a long period of bloom, Bhilai must make the most of it
and emerge as a leader. A true leader has to be alert and proactive all the
time formulating strategies to Out perform the competitors cost
reduction is one of the such strategies that can give us that competitive
edge.
 It is the renowned efforts of the BSP organization which has
success in economizing usage, optimizing resources eliminating wastage
of all kinds, concentrated on growth quality product and service which
ultimately helped in cost of product to earn great amount of profit every
year. Bhilai rededicates itself to the service of the nation, whose hand
child it is. A new and glorious era leading to the gold has just begun and
horizon is bright.
 SUGGETION

As BSP itself one of the most recognized and leading steel industry
in India. Its products are of high quality and it is sold not only in the
domestic area of the country but its products are also exported to foreign
countries. Keeping these in view it is not possible to give suggestion
about BSP as it is one of the leading steel producers of country. But I
would like to give suggestion to BSP only that it should increase its
customer s base and market in the domestic area also. Secondly, BSP is
major contribution to export is Rail Mill products, so it should also pay
his attention to other products also.
On the other hand, Marketing of Secondary products needs some
attention from top level management. This department is producing great
amount of revenue every year but again there are some problem facing by
local customers. As per the survey on various consumers of secondary
product at local area it shows that BSP s has some drawback in its
secondary product s marketing strategy.
As per feedback from various local customers of secondary product,
they think that BSP is not giving the proper attention to local customers
and ignores their needs. Apart from that refund policy of secondary
product is also not mature; it takes very long time to refund the excess
money, given by the customers. Some customers are not satisfy with the
E-Auction policy, they think that the final declaration of selected
customers announce in 5 days after the biding close, which is against the
rule of E-Auction method. Even some customer thinks there is partiality
exist in selection of customer in Tender & E-Auction method as they are
not selected many times even after biding high prices.
 So I would like to suggest marketing department of secondary
product that they should take corrective steps against all above problem
faced by local customers and gives an extra attention to local customers.

Steps to Improve the Customer Satisfaction in Local region

(under 100 KM radius)

Uniform Pricing Policy

Tighten the Refund Method

Regular Feed Back System

Reducing the No. of Day of declaring Final Customer in E-

Auction method.

Increase the daily quota of sale. (which currently is 200

tones)
 BIBLIOGRAPHY

SAIL News Journals

Annual Performance Plan 2004 2005

Information collected by Marketing Department.

Work visit notes of BSP

Data collected by different customers.

Official website of SAIL : www.sail.co.in

 QUESTIONNAIRE

What the total num. Of employees working in your company?

1. Less than 50

2. 50 100

3. more than 100

What is the annual requirement of input materials (raw) in tones?

1. Less than 500 tones

2. 500 1000

3. more than 1000

From last how many years your company purchasing materials from
BSP?

1. Less than 3 years.

2. 3 7 years

3. more than 7 years

Categorized the input materials purchased from BSP and corresponding

quantity?

1. Billets & Blooms

2. Wire rods

3. Slabs

4. Scraps

5. Coal Chemicals
Is your company purchase material from other organization if yes then
type of materials and quantity?

1. Yes

2. No

Whether the company is engaged in other business apart from steel, if

yes then what is that?

1. Trading

2. Distribution

3. Production

Whether the company prefers purchasing material through fixed price /

tender or forward auction?

1. Fixed Price

2. Tender

3. Forward auction

Difficulties encountered by the company in conducting business with

BSP?

1. Yes

2. No

Major drawback of the BSP s sale policy in sale of secondary product

and suggestion for any improvement you want?

1. Partiality

2. Ignorance

3. Pricing policy
Apart from purchasing steel what are other input expenses are incurred
by your company?

1. Electricity

2. Water

3. Gas

4. Chemical

5. All of above

Whether the end product is sold through retail outlets / direct sold to end
customer, i.e. marketing network of the organization?

1. Retail outlet

2. Direct sold

3. Auction method

Whether the company is engaged in trading also, if yes, then what

percentage of steel purchased from BSP is used for production and what
percentage is for trading?

1. 10 % to 25%

2. 25% to 50%

3. More than 50%

Long term plan of the company, if any (like expansion, capacity

enhancement, shifting over to other input materials etc.)?

1. Yes

2. No
List of the end products manufactured and cost of production (rs/tonne)
of each end product?

Selling price of each end product over the past 2 years?

Company prefers purchasing material through fixed
price, tender or forward auction?

E-
Auction

Tender Fixed
Price

Fixed Price 62%

Tender 20%
E-auction 18%
How many customers faced difficulty during transaction with
Bhilai Steel Plant.

YES

NO

No difficulty 71%

Yes 29%
Major drawback of BSP s sale policy in sale of
secondary products, customers thinks.

Pricing
policy

Ignorance
Partiality

Partiality 57%
Ignorance of local customers 34%
Pricing policy 9%
Categorized the input materials purchased from BSP and
corresponding quantity?

Coal Billet &

Chemicals Blooms
Slabs

Wire Rods
Scraps

Coal Chemicals 9%
Billets & Blooms 8%
Slabs 15%
Wire Rods 12%
Scraps 56%
Whether the end product is sold through retail outlets /
direct sold to end customer, i.e. marketing network of the
organization?

Auction
Retail
Method
Outlet

Direct
Sold

Auction Method 2%
Retail Outlet 22%
Direct Sold 71%
Whether the company is engaged in other business apart
from steel, if yes then what is that?

Trading

Distribution
Production

Trading 11%
Distribution 12%
Production 77%
This document was created with Win2PDF available at http://www.daneprairie.com.
The unregistered version of Win2PDF is for evaluation or non-commercial use only.