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Master Premier League

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Himanshu Shrivastava Pooja Kumari Kumar Samudra Gupta Kaushik Ranveer Singh

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Mission Statement

To accomplish growth and Knowledge at in house Master Premier League

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Steel Industry

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Mission & Vision Statement
Mission Statement

The Company embraces certain core values in order to function ethically,


effectively and prosper further

Vision Statement

To create a competitive advantage for all stakeholders through effective people


management

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Steel Industry Overview

Steelindustry plays an important role in the economic development of a


country
India,being the 9th largest steel producer in the world, has a share of about
3.2% in world steel production of a little over 900 million tonnes (MT)
Despite this, the per capita steel consumption in India is one of the lowest,
thus providing the domestic industry with a huge potential to scale greater
heights
steel demand, being derived from other sectors like automobiles, consumer
durables and infrastructure, its fortune is dependent on the growth of these
user industries 7
The Indian steel sector enjoys advantages of domestic availability
of raw materials and cheap labor. Iron ore is also available in
abundant quantities. This provides major cost advantage to the
domestic steel industry
Steel demand has outpaced supply over the last five years
Driven by rising infrastructure development and growing demand
for automotives, steel consumption is expected to reach 104 MT by
2017
Itis expected that consumption per capita would increase
supported by rapid growth in the industrial sector, and rising infra
expenditure projects in railways, roads & highways, etc.
Total consumption of finished steel grew by 3.4 per cent year-on-
year at 6.015 MT during April 20178
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Why Bhushan Steel ?

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Board of Directors and Authority

Brij Bhushan Singhal Neeraj Singhal


(Chairman) (Vice Chairman & MD & CEO)

Nittin Johari Prem Kumar Aggarwal


(Whole Time Director-Finance) (Whole Time Director-Commercia)

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Organization Structure
Managing Director

GM-Production AGM-Works AGM-Marketing GM/MD-Finance AGM-Marketing

Purchase Statutory Business Company Information


Compliance Development Accounts Technology
Raw Material Personnel &
Handling Sales-tax Officers Corporate
Admin Market Research
Communication
Planning &
Control Maintenance Client Excise-Officer
Co-ordinator
Quality Check Factory
Billing
Development

Logistics
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Concept of Human Resource Management

Human Capital is an important source of its competitiveness


Management Practices designed to foster meritocracy
They strive to attract best available talent ensuring a diverse workforce

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Training BPSL Scheme

Human Resource
Initiative

Career growth Mentoring


plan Scheme
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HR Values
Respect for Individual
Integrity
Meritocracy
Dynamic Thinking
Creativity & Innovation
Social Responsibility

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Work Culture

Freehand in decision making execution of project work


Fixed working hours
Responsibility distribution
Infrastructure is Environmental friendly
Lack of Hierarchy
Nepotisms

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Performance
Evaluation
Performance Evaluation

Merit Rating Regular Review Directors


Method of Employee Contribution at
Board Meetings

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Remuneration & Reward
Support for Objective
Policy
Transparency
Internal Equity
External Equity
Flexibility
Performance Driven Remuneration
Affordable & Sustainable

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Training &
Development
Training External Training
In House Training & Development (Overseas Training
Program)

Input

Process

Performance
Productivity

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Corporate Social
Hospital & Health
Responsibility House Keeping
Care Program Facility

Control Of Air
Environmental
Pollution
Concern

Control of Water
Pollution

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HR Case
Syndicate Bank Ltds chairman and managing director is alleged to
have received bribes to sanction loans. Bhushan Steel is one of the
companies named in this probe. Singhal was arrested on 7 August
Threat call charge on Bhushan Steel Ltd.

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PESTLE
P- political
E-economical
S- social
T-technological
L-legal
E-environmental

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Political Economical

Taxation policy, international trade Down turn of the economic scale


regulations enforce to change the the organization faced loss
strategic implementation in
business Technological
Adaptation towards technologies the
Social
organization is having sustainable
With the ethical behaviors and trust in growth in markets with improving
the leadership the organization is operations and productions
maintaining their social and ethical The technological evolution also
responsibilities considering the imposes threats in the competitive
nations communities
measures.
Environmental
Legal
Carbon emission and the carbon Health and safety rules for the
footprint during the production has been employees and customers
impacting over the business
Monitory and fiscal policies

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Michael Porters 5 Forces

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Threat of Substitute
It is medium to low

Barriers to entry
It is low
Bargaining power of Following are the factors that vindicates Bargaining power of buyers
Supplier Capital Requirement: Steel industry is a capital intensive
Buyers have low bargaining
business
The bargaining power of power
Economies of scale:
suppliers is low for the fully Lowering the costs
integrated steel plants (their Better bargaining power while sourcing raw materials
own mines of key raw material Government Policy
like iron ore coal) Product differentiation
low barriers in terms of product differentiation

Threat of rivalry

It is medium in the domestic steel


industry demand still exceeds the
supply

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Segmentation

1.Purchasing approaches
Purchasing Function Organization: Serve the company with
highly centralized purchasing organization
Nature of existing relationship: Serve companies with
which they have strong relationship

2. Situational factor
Size or Order: Focus on Large orders

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Targeting
Automotive Industries
White Goods Industries (LG, Samsung)
PSUs ( NALCO, NMDC)

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Marketing Mix

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Product

Flat Long Product


Cable Tapes Wire Rod

GP coils Bar Mills

Steel coils
GP Sheets
Corrugated Sheets
Cold Rolled Sheets
Narrow CR coils

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Products

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Products

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Products

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Products

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Price
Factors influencing pricing strategy of BSL are:
Production cost
Market demand
Govt. regulation

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Place
Distribution Channel at
BSL

Domestic Trading Export


OEM (0 Level)
(1 Level) (0 Level)

Order in form of No Order Order


Schedule

No Payment Payment in
Payment As per
form of LC
Agreement

Totally based on
Delivering on
Projection
Schedule
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Promotion
Advertisement

Personal Selling Public relation

Promotion
Direct Marketing
Newspapers
Power& Steel
Magazine of India

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Packaging
High tensile steel strapping for packaging

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S
Strength Opportunity
Location advantage Industry growth

O
Availability of its own Iron ore Adaptation towards newer
Integrated values technology
Technology
Growing demand for steel

Weaknesses Threats
Availability of raw materials Up and down of steel price
Low R&D investment Technological change

W Low productivity
Inadequate infrastructure
Power shortage is there at BSL
Price Sensitivity and demand
volatility
International competitors

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T
P.O.D. P.O.P.

Strong volume
growth and Market driven
backward integration

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Operation of Bhushan Steel Ltd.

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Reason Behind Khopoli
Plant
Proximity to Alibarg and Candla ports. This helps them to export there
goods easily
Proximity to Mumbai
The company whose capacity is to produce 425000 MT per annum
cannot be set-up in the city. Thus it is well set away from the residential
area but not too far from the market
The Khopoli plant is 6kms away from NALCO
Proximity to river water
Proximity to railway

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Orissa Plant

Located close to iron ore and coal mines

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Reason Behind Sahibabad
Plant
Located near to major automobile and white goods
manufacturing hubs such as Maruti, LG, Samsung and
Honda

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Distribution Channel at
BSL

Domestic Trading Export


OEM (0 Level)
(1 Level) (0 Level)

Order in form of No Order Order


Schedule

No Payment Payment in
Payment As per
form of LC
Agreement

Totally based on
Delivering on
Projection
Schedule

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Product Imported
Value % of RM cost
Product Name Unit Quantity
Rs crore to Total Cost

HR/CR Steel
>MT 888021 2580.69 79.30
Strips/Sheets/Coil

Zinc & Alloys >MT 26502 263.54 8.10


Iron Ore >MT 611143 233.16 7.16
Coal >MT 751576 130.21 4.00
Paints >MT 2179 36.11 1.11
Coal-Purchased >MT 44486 6.12 0.19
Dolomite >MT 33614 4.43 0.14

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Raw Materials
Iron ore
BSL sources 60-70% of its iron ore requirements from NMDC and the balance is
procured from the spot market
BSL has been allocated Marsua Tirba mines in Keonjhar district, Orissa with
reserves of 70mn tonnes

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Contd......

Coal and coking coal


BSL has been allotted coal mines in New Patrapara, Orissa, in a joint
venture with Visa Steel, SMC Power Generation Ltd, Orissa Sponge Iron
and Steel, Deepak Steel and Power, Sri Metaliks and Adhunik Corp

Total reserves are estimated to be 650mn tonnes, of which BSL's share will
be 325mn tonnes
In addition, BSL has been allotted the Andal East Coal block in West
Bengal, with estimated reserves of 235mn tonnes, and the Urtan North
coking coal block in Madhya Pradesh, which has an estimated reserves of
55mn tonnes
The company imports its coking coal requirements from Australia and
thermal coal is sourced from Mahanadi coal fields and e-auction
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Product price increase in 2010
Repercussion- shares were lower by 2.40% at Rs 446.40/-
Prices are going up because of the pressures of increase in raw material prices.
Coking coal prices have gone up by 8% to 10% in the last quarter and even the iron
ore prices are going up. There is no way that the steel company can absorb these
kind of a price increases, so we definitely have to increase the prices of steel. Most
of the companies have increased the prices this month and we have to see how this
behaves in terms of the demand

Read more at:


http://economictimes.indiatimes.com/articleshow/7064685.cms?utm_source=conten
tofinterest&utm_medium=text&utm_campaign=cppst

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EXPORT
The secondary products are finished products like colour coating coils, colour
coating sheets, corrugated sheets, GP coils etc
Export from PAN India basis and the region wise export per month on an average
is as following:

Gulf 31%
Africa 40%
Europe 10%
Far East 3%
Latin America 13%
In export , two major categories, the break-bulk category and the other is
containerized cargo. One of our major products i.e., API pipes which is produced in
the Khopoli plant, Mumbai is exported in break-bulk from the Bombay port. HR
(hot Rolled) coils which is produced in the Meramandali plant, Orissa is also
exported in break-bulk from the Paradip port
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Contd.....

BSL started exporting only through 20 ft containers


Break-bulk which work out to be more cost effective was used .So they started
exporting to China and Antwerp through it
Drawback- Inventory cost

We have to keep a minimum of 10,000 MT of cargo in stock which calls for high
inventory cost in comparison with the freight that is being offered to us today and the
rejection rate is moderately high for break bulk cargo. Customers tend to reject about
10% of the commodity on account of unsatisfactory quality or damages etc. So we
try to keep a balance between break-bulk and the containerized cargo.
There was also a turning point of exporting HR coil from the dead port called
Paradip port. About 3 years back we have started exporting HR coils from the Paradip
port
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Contd......

Establised distribution Centre at Nigeria which will later be converted into a


plant.Aarti Steel Nigeria Ltd ( Bhushan Steel Ltd Group)
We already have our own distribution Centre at UAE & Djibouti(East africa)

BHUSHAN STEEL GLOBAL FZE

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Outsourcing logistic
An ideal logistics company is one that provides consistency in its services and
provides competitive prices

1. Rates/Freight
2. Long Term Relationship
3. Free Days
4. Credit Terms

Eg: Goodrich (EXPORT), Ptraans Logistics (India) Pvt. Ltd. (DOMESTIC),


Arshiya Logistics Infrastructure(DOMESTIC),Rhenus logistic

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Delivery
Bhushan Steels Management policy is to only work on LC basis(a letter of
credit) whereas other steel manufacturers work on advance basis
Delivery period is 33 days. Within 33 days the commodity irrespective of the
quantity
Most of the steel manufacturers take orders in 1000s, we even take orders for
25 MT. Our aim is to satisfy the needs of our customer

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Contd....
Under the EPCG scheme, steel companies have to meet the six-year export
obligations in blocks of (4years,2years)
If a company fails to meet the obligation in one block it can carry forward the
deficit to the next two years by paying a penalty. The penalty is the sum of
unfulfilled export obligation and an interest at 15 per cent per year from the date
of clearance of goods. Steel firms say that the penalty is stiff, given the overall
sluggishness in the industry
While the steel companies have increased capacity by over 10 million tonnes
over the past few months led by Tata Steel and JSW Steel commissioning 3
million tonnes per annum each and Bhushan Steel adding 1 mtpa the
industry has sought the Centres intervention in relaxing the norms

(July 24, 2016)

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RATIO ANALYSIS

PROFITABILITY
RATIO

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PROFIT BEFORE INTEREST AND TAX MARGIN
17.82
18.00
16.00
14.00
11.59
12.00 9.85

10.00 7.84
8.33

8.00 6.58

6.00
4.00
2.00
0.00
2014 2015 2016
BHUSHAN STEEL PENNAR INDUSTRIES

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NET PROFIT MARGIN

5.00 2.41 2.83


3.35

0.64
0.00
2014 2015 2016

-5.00

-10.00
-11.77
-15.00

-20.00

-25.00 -24.05

BHUSHAN STEEL PENNAR INDUSTRIES


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RETURN ON NET WORTH
9.45 8.87
7.50
10.00
0.57
0.00
2014 2015 2016
-10.00

-20.00 -16.17

-30.00

-40.00

-50.00

-60.00
-62.49
-70.00

BHUSHAN STEEL PENNAR INDUSTRIES

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RETURN ON CAPITAL EMPLOYED

20.00 18.21
17.62
18.00
16.00 14.89

14.00
12.00
10.00
8.00
6.00 4.29

4.00 2.69
2.14

2.00
0.00
2014 2015 2016

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LIQUIDITY & SOLVENCY
RATIO

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DEBT EQUITY RATIO

10.00 9.36

9.00
8.00
7.00
6.00 4.99

5.00
3.53
4.00
3.00
2.00
0.49 0.52
1.00 0.45

0.00
2014 2015 2016

BHUSHAN STEEL PENNAR INDUSTRIES

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DEBT COVERAGE
RATIO

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INTEREST COVERAGE RATIO
3.45
3.50
2.82 2.83
3.00

2.50

2.00

1.50
1.06

1.00
0.50

0.50 0.22

0.00
2014 2015 2016

BHUSHAN STEEL PENNAR INDUSTRIES


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MANAGEMENT EFFICIENCY
RATIOS

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DEBTORS TURNOVER RATIO
4.97

5.00
4.45 4.38 4.32
4.50 4.03

4.00 3.63

3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
2014 2015 2016

BHUSHAN STEEL PENNAR INDUSTRIES


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TOTAL ASSETS TURNOVER RATIO

2.50
2.14
2.06

2.00
1.68

1.50

1.00

0.50 0.24 0.25


0.23

0.00
2014 2015 2016

BHUSHAN STEEL PENNAR INDUSTRIES


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http://www.bhushanpowersteel.com/hr-philosophy.html
http://www.bhushan-group.org/ViewerJS/HR%20policy.bmp
http://www.thehindubusinessline.com/companies/data/Bhushan-Steel-Limited/board-of-directors/54
602/
http://www.bhushan-group.org/policies.html
https://www.glassdoor.co.in/Reviews/Employee-Review-Bhushan-Steel-Ltd-RVW2804242.htm
https://www.glassdoor.co.in/Reviews/Bhushan-Steel-Ltd-Reviews-E246527.htm
http://www.bhushanpowersteel.com/career.html
https://www.slideshare.net/rsp_mba_projects/performance-appraisal-in-rourkela-steel-plant-mba-inte
rship-hr-project-report
http://www.bhushan-group.org/awards-recog.html
http://www.bhushan-group.org/Investor%20Relations%20pdf/Policies/Remuneration-Policy.pdf
http://www.hindustantimes.com/business-news/npa-crisis-the-rise-and-fall-of-bhushan-steel-in-the-
great-
indian-debt-trap/story-GHrvRRFIBsMLXKJzbqvaFN.html
http://www.livemint.com/Money/H8ftNVnpbTVf3BvwtVcWDM/Will-Bhushan-Steel-be-able-to-service-
its-debt.html
http://www.business-standard.com/article/pti-stories/gross-npas-in-steel-sector-at-rs-1-15-lakh-crore-
74
govt-116111601155_1.html
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