Online Marketing of Steel: A Case Study of Metaljunction.com
EXECUTIVE SUMMARY
This project entitled “Online marketing of Steel: A Case Study on Metaljunction.com and RSP ” is undertaken as a partial completion for my MBA degree in Center for Management Studies,(OEC) (Bhubaneswar)
The main purpose of this project is to find out the process to sale the secondary steel products of Rourkela Steel Plant through online auction and how this process is very helpful as compared to the previous system that is “Order Booking System”.
During the production of prime products some scraps and defectives items are generated in course of production. These are generally used by different small- scale industries for different purposes. There fore these secondary products are to be marketed in various ways and to all type of venders, and it is very tough task for Rourkela Steel Plant to satisfy all the venders by giving equal weight age to all.
This project makes a deep study on the system followed for marketing in Rourkela Steel Plant so as to make the company as well as the customers (small scale industries) beneficiary. Rourkela Steel Plant, one of the pioneering units of SAIL is a hallmark of excellence in the steel-making scenario of India today. All SAIL products including products of Rourkela Steel Plants are marketed through it’s Central Marketing Department (CMO). To ensure quality and prompt dispatch of the products, CMO keeps I touch with producing units as well as the transport and shipping sectors.
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Marketing itself a tough job, which requires proper planning, logic and strategic to be applied at correct time and place. It includes also the way of selling the products. All the things isre applied in RSP also. The marketing department RSP is a combination of Auction and disposal. Secondary Steel Stockyard Iron and Steel Secondary. Coal Chemicals, Waste Products, SPP
The secondary products of RSP can be divided into 3 categories. Iron & Steel. Coke Fraction & Coal Chemicals. Other Wastes. Selling of these items is not just selling goods but catering to the demand of the customers by adopting various changing strategies but always taking “ CUSTOMER FIRST”, and the above secondary products are not manufacturing with a predetermined target. Marketing of secondary have accounted for a sale of worth 330.42 crores in the year 2004-05. For selling the secondary items RSP blended with the modernization aspect and follow the following. Online Auction Single Window System. Online auction refer to those auction conducted through Internet, and they can access the auction with a valid password, which they will receive after fulfill the conditions. The bidders of different locations simultaneously bidding for the selected items in the auction. After only one bidder (normally the bidder who bid the highest price) is awarded all the units of the items being auctions.
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In single window system, it is possible for the bidder to get all the material and finish all the processes, which are required, at the SSSY itself. Which has reduced time and giving the customer east in dealing
INTRODUCTION
Steel Authority of India Limited (SAIL) only the name is sufficient gives a brief idea about the company. As we know Sir Jamshedij Tata sowed the seeds of modern steel industry in 1907 when Tata Iron & Steel Company Ltd (TISCO) was established. I the year 1939 production of steel started in another private steel company called the Indian Iron and Steel company, now a subsidiary of the Steel Authority of India. After the independence (SAIL) Steel Authority of India Limited became a major player of steel and iron and a major supplier to all the fields. After the globalization SAIL having big opportunity to expand their sales globally and became one of the major supplier of Steel and Iron. As we know that what ever is made that must be for some purpose and that must be sold but the process may be different from one another.
ONLINE MARKETING
Online Marketing is marketing on the Internet. It is a type of e-marketing, which in turn is a type of e-commerce. While at first the confusion of experiments, beta versions of websites, search engines and other online devices cause marketers to consider this world of the Internet unknowable and perhaps too unpredictable, there is now a growing body of work to which marketers are now paying attention in order to develop online marketing programs. The most known tools to marketers in the mid 2000s are currently tools grouped into 2 fields: online advertising and search engine optimization. E-marketing tools used to drive visitors to a web site include.
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Purpose of Online Marketing
When marketing online, the general four step process of marketing is still the guiding idea, in the online world the character of marketing becomes more deeply a conversation between a marketer and a market-of-one a concept that is central to The cluetrain manifesto. In such a role as a communicator, the online marketer is in a position to build awareness of her/his company or business in more personal terms than otherwise, and in so doing enables a more human conversation. Such conversations tend to be more warts and all and should establish confidence of the potential purchaser in the potential vendor Smith and Chaffey (2001) claim that Internet technology can be used to focus marketing on the customer, while at the same time linking to other business operations so as to achieve profitability. This can be done by
• Identifying - the Internet be used for marketing research to find out customers' needs and wants. • Anticipating - the Internet provides an additional channel by which customers can access information and make purchases - understanding this demand is key to governing resource allocation to e-marketing. • Satisfying - a key success factor in e-marketing is achieving customer satisfaction through the electronic channel, this raises issues such as is the site easy to use, does it perform adequately, what is the standard of associated customer service and how are physical products dispatched? Detractors of this concept of human-to-human contact through online conversations suggest that companies are going to be careful about marketing in this manner and perhaps will never really have honest and open conversations as the interests of companies and businesses are not the interests of potential purchasers. The cluetrain manifesto allows for this type of thinking suggesting that businesses when marketing in this manner need to be thinking about more than just making money; if a business is thinking only about making money, it will become apparent in close online conversations and the market will treat that business in whatever manner it may as markets can now talk to each other through the same means marketers talk to potential customers.
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Online Marketing Activities
Smith and Chaffey (2001) describe five key online marketing activities (the '5Ss') which can be applied by an organisation to implement various online marketing tactics, the 5Ss are: Sell - Grow sales (acts as both a customer acquisition tool and a retention tool ). Serve -Add value (give customers extra benefits online such as an online exclusive offer or more in-depth information about your products or the industry sector) Speak-Get closer to customers by creating a dialogue, asking questions through online research surveys and learning about customers' preferences through tracking - which content are people most interested in. Save - Save costs (of print and post if you have a traditional offline it canextend to those customers you can't afford to communicate with) Sizzle- Extend the brand online. It keeps the brand 'front-of-mind' and helps reinforce brand values. Added value can also be delivered by informing and entertaining customers.
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Market Strategy of RSP
Today in this Global market marketing strategy plays a vital role in business activities. With the effective business strategies a business can achieve it’s target, mission and vision.
I have observed while undergoing my summer training in Rourkela Steel Plant under marketing department, that they have adopted the most effective method of selling their secondary product since 1st April 2004 that is “Single Window System”. This system allow to sale the secondary product by Online auction through “METALJUNCTION.COM” which is joint collaboration of 50:50 between ‘SAIL’ and ‘TATA’. The most interesting part of this system is that the payment and delivery process is done under one roof, the customer need not to go two different places to do the formalities. The customer can lift the material from the stockyard by paying the quoted price.
Better marketing policies are considered as the backbone of the sales. Rourkela Steel Plant (RSP) is doing “Business to Business” marketing and here better marketing policies plays the role of life blood for the business, and after globalization it’s became very necessary for every business to give more stress on marketing strategies so as to retain more and more customers.
During my training process I have observed that the “Single Window System” is the best method of selling the secondary product of RSP and this method is also helps to reduce the trading formalities and middleman in delay the trade process.
This project report clearly explains the selling of secondary product of RSP through “METALJUNCTION.COM”.
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STEEL INDUSTRY
Iron working can be traced as far back as 3,500 B.C. in Armenia. The created independently by Henry Bessemer in England and William Kelly in the United States during the 1850s, allowed the mass production of low-cost steel; the open-hearth process, first introduced in the United States in 1888, made it easier to use domestic iron ores. By the 1880s, the growing demand for steel rails made the United States the world's largest producer. The open-hearth process dominated the steel industry between 1910 and 1960, when it converted to the basic- oxygen process, which produces steel faster, and the electric-arc furnace process, which makes it easier to produce alloys such as stainless steel and to recycle scrap steel.
The business of processing iron ore into steel, which in its simplest form is an iron-carbon alloy, and in some cases, turning that metal into partially finished products or recycling scrap metal into steel. The steel industry grew out of the need for stronger and more easily produced metals. Technological advances in steel making during the last half of the 19th cent. Played a key role in creating modern economies dependent on rails, automobiles, girders, bridges, and a variety of other steel products.
Global steel production has now crossed the 1 billion tones mark due to an upturn in steel demand during the last two years on the back of recovery in the global economy. The recovery has largely been led by increased demand for steel in China as the country focuses on strong infrastructure led growth and prepares for Olympics 2008. There has also been partial recovery in key sectors such as housing, construction and automobiles in the USA and Europe and the Japanese economy is also promising to turn around after a prolonged phase of recession. In 2002 China became the largest producer and consumer of steel in the world. The current Chinese demand is estimated at over 250 MT. China is now followed by Japan and the USA in terms of production. But at the backdrop of this recovery has been one of the most turbulent phases for the global steel industry. The industry went through one of its most difficult phases between 1997 and 2001, as it faced severe recession in the global economy leading to imbalance between capacity, demand and production. After the breakup of USSR many new countries turned into net exporters from net importers and the world market had an excess capacity of 50 MT. Steel started getting traded at lower and lower prices. The Asian economic meltdown in
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1997-98 had a further impact on steel demand and supply. Demand in Southeast and Fareast was reduced by 35-40 MT. Japan was faced with a weak Yen and lower demand. These events coupled with similar developments across the world led to a situation where producers had much higher capacity than they could sell. Prices of steel during this period touched a 20- year low (with HR Steel going below $200 mark in 2001) and most producers made heavy losses. Many companies were forced to shutdown leading to loss of many jobs. New capacities became uneconomical and surplus. Fresh expansion plans had to be abandoned as Financial sector withdrew support from the steel sector. The period also witnessed major steel producing nations resorting to tariff and non- tariff barriers to safeguard their domestic industry. Pushed to the wall, in 2001 advanced countries were forced to call for a global agreement organized by the OECD to limit the world output of steel and stem the slide in steel prices. Only in 2002 the global steel industry witnessed a turnaround led by growth in China and prices of steel recovered to realistic levels once again.
World Crude Steel Production
Period Production (MT) Growth 1995 752 -0.50% 1996 750 -0.30% 1997 799 6.50% 1998 777 -2.80% 1999 788 1.40% 2000 848 7.60% 2001 850 0.20% 2002 902 6.10% 2003 1000 9.70%
A look at the world steel production figures shows the difficult phase between 1995 and 2001 (with 2000 being the exception) and recovery that took place 2002 onwards. Another important development in the global steel market in the last few years has been the emergence of steel intensive technologies in various user industries leading to increased usage of steel. The consumption is showing a shift from long products to flat products and special quality steels.
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Global steel trade has now increased to 350 MT. The industry though continues to be fragmented with top 5 players accounting for less than 20% of the total industry capacity. Global steel manufacturers are increasingly realizing the need to have alliances and consolidation activity has picked up all over the world during the last 2-3 years. Today, Arcelor (Europe) is the largest producer of steel in the world followed by LNM-Ispat Group, Nippon Steel, JEE Holdings, Posco and Shanghai.
Market Scenario
• After liberalization, there have been no shortages of iron and steel materials in the country. • Apparent consumption of finished carbon steel increased from 14.84 Million Tonnes in 1991-92 to 34.389 million tonnes in 2004-05. • Steel industry that was facing a recession for some time has staged a turnaround since the beginning of 2002. • Efforts are being made to boost demand. • China has been an important export destination for Indian steel. • The steel industry is buoyant due to strong growth in demand particularly by the demand for steel in China.
Production • Steel industry was delicensed and decontrolled in 1991 & 1992 respectively. • India is the 9th largest crude steel producer of steel in the world. • In 2004-05, production of Finished (Carbon) Steel was 40.055 million tones (Prov). • Pig Iron production in 2004-05 was 3.228 Million Tones (Prov). • The share of Main Producers (i.e SAIL, RINL and TSL) and secondary producers in the total production of Finished (Carbon) steel was 61.5% and 38.5% respectively during the period April-February, 2006. • Last 4 years production of pig iron and finished carbon steel is given below:
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The Growth Profile
Steel The liberalization of industrial policy and other initiatives taken by the Government have given a definite impetus for entry, participation and growth of the private sector in the steel industry. While the existing units are being modernized/expanded, a large number of new/greenfield steel plants have also come up in different parts of the country based on modern, cost effective, state of-the-art technologies. At present, total (crude) steel making capacity is over 34 million tonnes and India, the 8th largest producer of steel in the world, has to its credit, the capability to produce a variety of grades and that too, of international quality standards. As per the ratings of the prestigious " World Steel Dynamics", Indian HR Products are classified in the Tier II category quality products – a major reason behind their acceptance in the world market. EU, Japan have qualified for the top slot, while countries like South Korea, USA share the same class as India.
Impact There will be no changes in the excise and customs duty for steel companies. The rationalization of the excise duty to a single central value added tax will have no impact on the steel industry. The current excise duty of 16% for steel products will remain. The customs duty for steel products will continue at the present rates. The move to tax the steel companies at factory prices rather than at the stockyards will have a positive impact on companies like SAIL and Tisco, which have very long lead distances. Induction furnaces and re rollers will now be covered under ad-valorem CENVAT at 16%(with modvat benefit). This will help the smaller players in the steel industry. The spending on rural housing is expected to move up, but as the correlation between steel usage and construction is low, we do not expect the move to have any major positive impact for the steel industry. With the excise duty on scrap going up to 16%, the position of sponge iron players can be expected to improve.
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Company Impact Company Name Overall Impact Reasons The move to tax the goods at factory gates rather than at SAIL Positive stock yards will have a positive impact on the company The move to tax the goods at factory gates rather than at TISCO Positive stock yards will have a positive impact on the company ESSAR STEEL Neutral No change in ED JISCO Neutral No change in ED JVSL Neutral No change in ED Duty Rates Customs duty
Commodity Name 1998-99 1999-2000 (existing) 2000-2001 (proposed) HR Coils 30% 25% 25% CR Coils 35% 35% 35% Semis 25% 25% 25% Pig Iron 20% 15% 15% Sponge Iron 20% 25% 25% Melting steel scrap 5% 5% Coking coal <12% ash 3% 5% 5% Coal/coke 10% 15% 15% Longs (galvanised) 30% 35% 35%
Excise (only basic duty)
Commodity Name 1998-99 1999-2000 (existing) 2000-2001 (proposed) Steel –semis and 15% 16% 16% finished Items. Iron ore 0% 0% Scrap 8% 8% 16%
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STEEL AUTHORITY OF INDIA LIMITED
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 five 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 ranges 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. Byproducts and Chemicals are marketed directly by the steel plants.
SAIL has a well equipped Research and Development Center 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 Center 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.
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With the capacity of 12 million tones (MT) of crude steel, the Steel Authority of India Limited (SAIL) is India’s largest and among the leading steel producers in the world with a turnover of over Rs 31,800 Crores.
In the International steel market SAIL has earned a reputation for itself as consistent and reliable supplier of world class quality products. SAIL products has been well accepted in more then 75 countries in the world, helping the company win recognition as major foreign exchange earner for the country.
Going beyond steel production , SAIL has formed several joint venture in different areas ranging from power plants to e-commerce. Three are with NTPC and DVC for taking care of steel plants captive power requirements, one with USX engineers and consultants, a subsidiary of US steel corporation, for prompting IT in steel sector, and one with Bansal mechanicals works for a service center at Bokaro. SAIL and TATA steel have also jointly set up metaljunction.com Pvt. Ltd, company managing e- commerce activities in steel and related areas.
The SAIL corporate office in New Delhi manages and overseas these vast business. Besides the sales chairman’s Sectt., corporate office comprises of the company’s finance, operation, commercial, personnel and project directorates.
Today, the accent in SAIL is to continuously adapt to the competitive the business environment and excel as a business organization both within and outside India. Central Marketing Organization
All SAIL ‘s products except alloy, special steels and stainless steels are marketed directly by CMO through units in co-ordination with rail, roads and shipping sector to ensure quality and promote dispatch of products. The main functions of CMO are as follows. Marketing of Steel products and fertilizers.
. Production planning and dispatch co-ordination with plants. . Export of steel. . Import of coal and other consumables. . Market research.
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. Information System.
Joint Venture
SAIL has promoted joint ventures in different areas ranging from power plants to e- commerce.
NTPC SAIL Power Company Pvt. Ltd Set up 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 tonnes 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 tonnes 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.
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.
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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.
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PRODUCT WISE CLASSIFICATION
Semis Blooms, Billets & Slabs. Long Products Structural, Crane rails, Bars, Rods, Rebars & Wire Rods. H R Coils, Sheets, Skelp Plats, C R Coils & Sheets, G C Flat Products Sheets/ G P Sheets & Coils, Tin Plates, Electrical Steel. Tubular Products Pipes. Railways Products Rails, Wheels, Axles, Wheel Sets.
PLANT WISE CLASSIFICATION
Blooms, Billets & Slabs Beams, Channels, Angles Crane Rails, Plates, Rails, Pig Iron, Bhilai Steel plant Chemicals & Fertilisers H R Coils & Sheets, Plates C R Coils & Sheets, Plates, C R Coils & Sheets, G P Bokaro Steel Plant Sheets & Coils / G C Sheets, Pipes, Pig Iron, Chemicals & Fertilisers. Blooms, Billets & Slabs, Joists, Channels, Angles, Bars, Rods & Rebars, Skelp, Wheels, Durgapur Steel Plant Axles, Wheels Sets, Pig Irons, Chemicals & Fertilisers. HR coils, Plates, CR coils & sheets, GP/ GC Sheets, Tin Plates, Electrical Steel, Pipes, Pig Rourkela Steel Plant Iron, Chemicals & Fertilisers.
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Major Units of SAIL
STEEL PLANTS LOCATION
Bhilai steel Plant Bhilai , hhattisgarh. Bokaro Steel Plant Bokaro, jharkhand Durgapur Steel Plant Durgapur,West Bengal Rourkela Steel Plant Rourkela , Orissa
SPECIAL STEEL PLANTS
Alloy Steel Plant Durgapur,West Bengal. Salem Steel Plant Salem, Tamil Nadu. Visvesvaraya Iron&Steel Ltd Bhadravati, Karnataka.
SUBSIDIARIES
Indian iron & steel Ltd. Burnpur,West Bengal. Maharashtra Elektrosmelt Ltd. Chandarpur, Maharashtra. Bhilai Oxygen Limited (BOL). New Delhi.
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OTHER UNITS
. Raw Material Divisions (RMD) . Central Marketing Organization (CMO) . Sail Consultancy Division (SCD) . Research and Development Center For Iron and Steel (RDCIS) . Center For Engineering and Technology (CET) . Management and Training Institute (MTI) . Sail Safety Organization (SSO) . Environment Management Division (EMD) . Growth Division (GD) . Central Power Training Organization (CPTI) . Central Coal Supply Organization (CCSO)
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ROURKELA STEEL PLANT
ROURKELA [Rourkela] , city (1991 pop. 398,864), Orissa state, E central India, at the confluence of the Koel and Lankh rivers. The city is built around a large iron and steel plant. Other products are heavy machinery, fertilizers, and chemicals. The Govt. of India under the ablest leadership of the then Prime Minister Pt. Jawaharlal Nehru, decided to set up large Steel Plants by the Govt. itself after the general election of 1952. Rourkela and its adjacent areas are rich in iron ores, manganese, dolomite and limestone’s, the basic materials for production of iron and steel. Considering Rourkela to be best place for a steel plant, the survey work was completed in the year 1954. The infrastructure work of the plant was accomplished in between 1955 and 1960. Almost thirty- two villages were alienated and the people of the villages were resettled. The Republic of Germany extended technical knows how for the construction of the steel plant and the plant was considered a joint venture of the Govts. Of Indian and Germany. The initial production limit of one million tones steel per annum was raised to 1.8 million tones in the subsequent years. The internationally reputed firms like the Krrups, Dimag, G.H.H. Sag, Scholomen, Cemens and Voist Eipine etc. Supplied different machines and machinery parts to the plant at the beginning stage. The Rourkela Steel Plant took the part of leadership in the process of steel production under L.D. techniques. It could also established itself as one of the premier industries of the world under the system of basic oxygen converter. The extension work of the plant was over by the year 1968. A circular welding pipe plant and special plate plant were set up in the decade of seventies for production of different ready- made materials. To avoid scarcity of power supply the plant set up a power plant by itself with a capacity of 120 M.W. The power plant is able to cater the requirement of power supply from the year 1986.
The modernization of Rourkela steel plant was begun in the month of August 1988 with a view to producing qualitative materials and establishing its importance in the world market. The process of modernization entailed an expenditure outlay of rupees 4500 cores. Some nine main packages including some ancillary packages were executed at the first phase. This phase revamped the process of supply of raw materials, new oxygen plant, improved techniques in blast furnaces, selling of dolomite plant, Cast house slag glandular plant, supply of raw materials two number of Sintering plant and coal handling plants etc.
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Similarly with the implementation of some sophisticated systems in the second phase of modernization Rourkela Steel Plant could get the status squo of a modern industrial unit in the world.The materials being produced from the Steel Plant are steel in gots, iron sheets, ultra thin plates, electric steel plates, cold rolled coils, hot rolled coils, tin plates and different kinds of pipes etc. The byproducts of the plant are fertilizer “Sona”, bitumen and benjol etc. Rourkela Steel Plant is planning to double its steel making capacity to 3.5 m tonnes in the next five years. Rap’s current steel making capacity is about 1.8 mt. This was announced by RSP’s Managing Director, Sanak Mishra recently.
Special Features OF RSP
1. 1st Public Sector integrated Steel plant to be set up in the country. 2. Exclusively producing flat products. 3. Finest Plant in India to adopt L.D. Process of Steel making. 4. It has got an electrical sheet mill capable of producing both Dynamo and Transformer grade electrical sheet. 5. It has a special plate plant where special alloy Steel Plates are shaped to different shapes as per requirement in the defence sector. 6. RSP has the distinction of being the unique Steel Plant in India with an integrated Fertilizer Complex. 7. It has two captive power plants (CPP) with a generation capacity of around 120 mw.
PRODUCT-MIX TONNES/ANNUM Plate Mill Plates 2,99,000 HR Plates 92,500 HR Coils 3,98,000 ERW Pipes 75,000 CR Sheets & Coils 4,33,000 Galvanized Sheets (GP& GC) 1,60,000 Electrolytic Tin-Plates 85,000 Silicon Steel Sheets 73,500 Total Saleable Steel 16,71,000
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PRODUCTS USES
Mainly we have identified certain products, which are primarily produced by RSP. These products are generally are ERW Pipes, CRNO Sheets, SW Pipes, etc. following are certain items and relevant use in different sectors. Steel as a basic building block will determine growth over several other sectors. Every attention, thus, needs to be given to stepping up capacity for steel. There is an urgent need to balance the interests of the producers and the consumers of steel • On flat products widely used by a variety of consumer industries, the increase has been by around 60 per cent – from around Rs.14, 000 to over Rs.22,000 per tones. On certain special steels used by automobile component manufacturers, the increase has been even steeper, by around 75 per cent. • Prices of steel used in the construction industry have increased from around Rs.15, 600 per tones to around Rs.23,000 per tones during November 2002 – August 2003. With the pressure on completing construction within the stipulated time, on grounds of penalties for delays, this segment depends on the market for its daily requirement and hence, seems to suffer the most. • HR Coils are used in number of engineering application. These coils are used in tube making & cold rolling of low carbon DD&EDD quality HR Coils are also used like telephone poles and also used in railway coaches and auto poly components. • SW Pipes are also used in transportation of crude oil, natural gas. Used in water supply, &civil engineering piling. • Cold Rolled Coils / Sheets are the primary products of RSP and used making steels furniture, refrigerator bodies, automobile bodies, railway coaches, etc. • Galvanized sheets are used in roofing paneling, industrial sheeting, air conditioning ducts and in structural constructions. • Electrolytic tin plates available in equal and differential coating range from 5.6gm/m2 coating weight and variety suitable for manufacture of beautifully printed and plan containers for packaging all kinds of products.
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MAJOR UNITS OF ROURKELA STEEL PLANT
Raw Material RSP
The raw material division (RMD) of SAIL was found in the year of 1989 with its headquarters at kolakata & all the captive mines of the steel plants in the eastern sector were gradually brought under it’s control to rationalized raw materials supply to deferent steel plants. A SAIL spokesman said the production by RMD was 12.3 per cent higher over the previous year. Total production of iron ore from Kiriburu, Meghataburu, Bolani, Barsua, Kalta, Gua and Manoharpur in Chiria crossed 13.46 million tonne during the year.
During the current financial year, RMD aims to step up production to 18 million tonne to meet the enhanced iron ore requirements for SAIL units in Bokaro, Durgapur, Rourkela and the IISCO steel Plant.The combined target for hot metal production by the steel plants of SAIL except Bhilai is 10 million tonne.
Sail Iron Ore Mines Profile Mines State Capacity (MTPY) Kiribru Jharkhand 4.25 Meghahatuburu Jharkhand 4.30 Bolani Orissa 3.00 Barsua Orissa 2.01 Kalta Orissa 0.80
RMD has a centralized workshop at Bolani for repair/overhauling of engines & transmission of heavy earth moving machinery at mines. Besides the above. RMD has three customers service office at Rourkela, Durgapur and Bokaro for co-ordination with the steel plants. Two liaison are also maintained at Bhubaneswar and New Delhi for better co-ordination with Govternment agencies and other statutory authorities.
COKE OVENS
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The 4.5 MT coke ovens produce metallurgical coke to feed the blast furence. The coke oven are equipped with wagon tripplers, automatic- handling facilities, coal-blending provision, coke to feed the crushing and coke screening arrangements. The partial briquetting of coal change is an effective process that ensures significant improvement in coke strength.
BLAST FURNACE
The Blast furnace iron making process basically consists of the conversion of iron oxide to iron in liquid form. There are four blast furnaces, which provide the required hot metal for steel production. Blast furnace 1,2 & 3 having the capacity of 1000 tones while the capacity of 4th one is about 1500 tones. This requires reductant for reduction of iron oxide and heat for the above reduction reaction to take place and for melting the products of smelting. The primary source to fulfill both these requirements is carbon (in the form of coke), which shares major portion of cost of hot metal production.
STEEL MELTING SHOPS (SMS) SMS-I
Apart from a computerized LD process, which has enhanced shop capability, the LA Vacuum Metallurgy Technique, has been also adopted for secondary refining of steel. This facilitates production of special steels for application in electrical machines, pipe making, tinplate, boilers and auto chassis members. The shop was originally designed to produce ingots for conversion to slabs through the Slabbing Mill route. However, after the discontinuation of the ingot route, the SMS-I produces slabs through casting machine.
SMS-II The Shop is provided with the latest steel making, secondary refining (ladle furnace and argon rinsing) facilities and two single strand slab casters to produce 1,355,000 tonnes of steel slabs annually.This is the biggest unit set up under the modernization programme. The shop is provided with automation through three levels of computerised control, LD gas cleaning and recovery, power distribution system, water and utility services.
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PLATE MILL
This 3.1 MT wide, 4 high reversing mill is equipped with on-line thickness measurement facilities. Facilities for inspection by customer's nominees, on-line ultrasonic testing and checking ensure the quality of plates dispatched to the customers. A new walking beam type furnace with a capacity of 100 Tonnes/hour was installed during the modernization programme for slab heating. The mill has a production capacity of 2,99,000 Tonnes per annum.
HOT STRIP MILL The facilities of the 1.440 Million Tonnes per annum mill were augmented during modernization with the installation of: • Two new walking beam type reheating furnace (225 TPH) • Roughing/sizing stand RoVo with automation • Automated coil box • Quick roll change system in Roughing Stand-1 and finishing mills • Coil marking, sampling and conveying systems.
COLD ROLLING MILL
This features a modern 5-stand tandem mill and a 4-high 1700-mm reversing mill. The tandem mill is equipped with automatic gauge control, x-ray gauge, data logging.It produces about 6,78,000 tones per annum of cold rolled sheet. ELECTROLYTIC TINNING LINE
The continuous electrolytic tinning line produces a shining tin-coated surface in a variety of coating thickness. The tinplate shearing lines are equipped with sensitive pinhole detectors and an automatic sorting system. GALVANISING LINES
Two continuous hot-dip galvanizing lines are equipped with jet-coating facilities. There are 2 multi-roller-corrugating machines, which produce corrugated sheets.
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SILICON STEEL MILLS
This unit produces steel for the electrical industry through various operations carried out in sophisticated, continuous/semi-continuous processing lines and a 4-high reduction mill. Advanced process control and product testing quality ensure product quality.
PIPE PLANTS
A highly sophisticated Spiral Welded Pipe Plant (SWPP) is equipped with submerged arc welding process and produces large diameter pipes. Hydrostatic pressure testing, ultrasonic testing and eddy current testing are some of the features, which ensure quality control. The Electric Resistance Weld Pipe Plant (ERWPP) caters to the smaller diameter pipe consumers. This plant has been recently upgraded to enable it to produce API grade pipes.
TRAFFIC & RAW MATERIAL
The Traffic and Raw Material department deals with procurement and supply of raw materials to various user departments, internal movement of in-process and other material from one unit to another and dispatch of finished products to outside parties or SAIL stock yards in railway wagons. The department maintains 350 wagons, 40 locomotives and a network of 240 kilometres rail tracks all over the plant.
ENVIRONMENT MANAGEMENT
RSP has invested about Rs. 340 crores on environment protection measures in 95 schemes, since 1990-91.By formulating and implementing a strategy of 3-R’s namely, Re-use, Recycle and Reduce, RSP is now able to achieve the twin objectives of generating resources as well as controlling pollution. Since its inception, RSP has so far planted 37 lakh saplings in and around the steel city and in 2005 RSP has planted 70,000-sapling in and around Rourkela.
COMPUTERISATION Rourkela Steel Plant has introduced an on-line system named as Production Planning and Control System (PPCS), which connects various functional departments of RSP into a single network system. Developed and executed in-house by a team of dedicated professionals of
26 Online Marketing of Steel: A Case Study of Metaljunction.com the Information Technology and Production Planning and Control Department with the support of the Works and Projects units.
HUMAN RESOURCE DEVLOPMENT CENTER (HRDC) The Human Resources Development Centre of Rourkela Steel Plant was set up in the late 1950s and it consists of the Management Development Programme wing, auditoriums, well equipped workshops, skill up gradation shops, lecture halls for act apprentices and a well- equipped library on a plethora of Technical and Managerial subjects.
CENTRAL POWER TRAINING INSTITUTE (CPTI)
The Central Power Training Institute (CPTI) has facilities to impart training in operation and maintenance of power plants and power distribution systems. The Institute conducts training largely for operation and maintenance personnel of SAIL captive power plants and Power Distribution Network departments.
PRE-TREATMENT OF HOT METAL
Hot metal from blast furnaces is treated to remove undesired elements like sulphur , silicon or phosphorous before being transformed to steel. Desulphurising agents are applied to reduce sulphur content of the metal.
FERTILIZER PLANT
The Fertilizer Plant was set up in the year 1964 with a view to utilizing the residue of the steel plant and the reutilization of the chemicals. There is a small hill called “Sona Parbat” towards the south of Rourkela Steel Plant. The Fertilizer Plant and the Fertilizer Township were set up adjacent to the hill. The plant was set up by the Indian Fertilizer Corporation Ltd. and was handed over to the Steel Authority of India Ltd. in the year 1973. An improved quality of fertilizer called “Sona” (Nitrogen) is being produced from the plant. The Rourkela Steel Plant has provided residential quarters and other accommodation facilities to the employees of Fertilizer Plant.
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ROURKELA STEEL PLANT MODERNISATION
This project with anticipated cost of Rs. 5024.20 crores was approved in July, 1988. The original date of commissioning was April 1995. The now anticipated date of commissioning for all packages is March, 2000 and has already suffered a delay of 59 months. This project is divided in two phases with Phase-I scheduled for commissioning in July, 1993 and Phase-II consisting of 5 global & 10 indigenous packages. The Phase I and almost all of the Phase 2 packages have been commissioned. Out of 5 global packages, Concast Plant package, Basic Oxygen furnace, Sinter plant II, plate mill and reheating furnace No.6 have been commissioned. Work on reheating furnace No. 5 has been delayed and it will be completed by March, 2000. For all practical purposes, modernisation project of Rourkela Steel Plant is complete in all respects and production objectives achieved. The expenditure, incurred till date is Rs. 4348.43 crores. The main constraints experienced (in the early years of its implementation) include; the lack of full mobilisation of resources by contractors and late delivery of equipment at site, and need to wait for shutdowns, for carrying out project work in an operating plant.
Record production in Rourkela Steel Plant
The Rourkela Steel Plant (RSP), a unit of the public sector Steel Authority of India Limited (SAIL) achieved a record high in the production of hot metal touching 1.78 million tonne. With 1.62 MT total saleable steel, the production of the Rourkela Steel Plant (RSP) has registered its best-ever annual performance since inception in all its major areas during last fiscal. According to official sources, the despatches of saleable steel during the period under review registered all time best figure of 1.6 MT. The company also shows significant growth over 2004-05 in the manufacture of products like plate mill plates (13 per cent), hot rolled plates (20 per cent), galvanised sheet (20 per cent), cold rolled coil (10 per cent) and a spiral wield pipes (76 per cent). The steel plant registered the highest ever converter lining life of 3,300 heats in steel melting shop-II and 1,100 heats in steel melting shop-I. Lowest ever energy consumption of 8.48 G Cal per tonne of crude steel was also achieved during the year.
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The specific water consumption and coke rate also came down by six per cent and four per cent respectively during the year, all these factors resulted in bringing down its cost of production.
ROURKELA STEEL PLANT PRODUCTS
Products Applications LPG Cylinders, automobile, railway wagon chasis and all types of HR Coils high strength needs. Plates Pressure vessels, ship building and engineering structures Chequered Flooring & staircases in the industrial sectors and railway platforms Plates etc. Steel furniture, white goods like refrigerators, washing machines, CR Sheets & automobile bodies, railway coach paneling, drums, barrels, deep Coils drawing and extra deep drawing etc. Galvanised Roofing, paneling, industrial sheeting, air conditioner ducting and Sheets structural Electrolytic Tin Containers for packaging of various products including edible oils, Plates vegetables and confectionary items. Silicon Steel Small generators, stators for high efficiency rotating equipment and sheets & Coils relays etc. High pressure transportation of crude oil, natural gas and slurry Spiral Weld transportation, water supply, sewage disposals, grain silos, civil pipes engineering pilings etc. High pressure transportation of oil and water, sewage disposal, tube ERW Pipes wells etc.
PRODUCT MIX Classification of products Primary products
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Pet products A) Pipes . Electric Resistance Welded Pipes (WER) . Spirally Welded pipes (SW)
B) Electrical Steel Sheets . Cold Rolled Grain Oriented Steel Sheets (CRGO) . Cold Rolled Non oriented Steel Sheets (CRNO) . HRD Sheets C) Electrolytic tin Plates
Non - pet products a) Plates b) Hot Rolled Coils c) Hot Rolled Sheets d) Prime slab e) Cold Rolled Sheets f) Galvanized Plane Sheets g) MS Slab h) Pipe Plant Return (PPR) Coils i) Cold Rolled Coils
Fertilizers a) Calcium Ammonium Nitrate (CAN) – ‘SONA’ b) Ammonium Sulphate (AS)
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SECONDRY PRODUCTS Iron and Steel a) Cast iron skull scrap. b) Cast iron U/R ingot steel. c) MS turning and Burning O.S scrap. d) Tundish steel skull. e) Steel skull trimming scrap. f) Iron and steel BF fines scrap. g) Bf dumps iron. h) Used/rejected CI bottom plates scrap. i) Used/rejected CI mould scrap. j) Cast iron skull scrap.
Re – Rollable scrap: a) Steel plates cutting scraps. b) Steel plates shearing scrap. c) Steel crop ends scrap. d) Concast steel short length slab. e) Concast steel slab crop end. f) CI skull scrap. g) URIN/IS. h) Steel skull scrap Gr-I. i) Side trimming. j) BF fines. k) BF drums iron. l) Steel skull Steel Melting Scrap
. Steel skull scrap. . Scrap bales (Bundle scarp from rail lines press). . MS turning and boring. . Side trimmimg.
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. Scrap slab.
Industrial Scrap a) CR steel cutting scraps. b) CR steel coils end scraps. c) CR steel cut flat end scraps. d) CR steel bas cut scraps. e) HR steel – cutting scraps. f)HR steel cut flat end scraps. g) HR steel small coils scraps. h) HR steel gas cut scraps. i) Semi Rolled steel plates. j) R/D tin plates scraps. k) Steel pipes end-cutting scraps. l) Steel coils end-cutting scraps. m) Steel test piece scraps. n) Sticker coils. o) Steel short plates (below 12 mm). p) Steel short plates (12 mm & above). q) Rejected/damage tin plates scraps. Defectives 1. DEFECTIVE HR COILS (2.0 MM) 2. DEFECTIVE HR COILS (2.3 MM) 3. DEFECTIVE HR COLIS (2.5 MM) 4. DEFECTIVE HR COLIS (2.8 MM) 5. DEFECTIVE HR COLIS (3.15 MM) 6. DEFECTIVE HR COILS (ABOVE 3.15 & UPTO 5 MM) 7. DEFECTIVE HR COLIS (ABOVE 5 MM) 8. HR U/T COILS FROM CRM (BELOW 3.15 MM) 9. HR U/T COILS FROM CRM (3.15 & ABOVE) 10. DEFECTIVE HR COIL (PICKLED) (2.0 MM) 11. DEFECTIVE HR COIL (PICKLED) (2.3 MM) 12. DEFECTIVE HR COIL (PICKLED) (2.5 MM)
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13. DEFECTIVE HR COIL (PICKLED) (2.8 MM) 14. DEFECTIVE HR COIL (PICKLED) (3.15 MM) 15. DEFECTIVE HR COIL (PICKLED) (ABOVE 3.15 & UPTO 5 MM) 16. DEFECTIVE HR COIL (PICKLED) (ABOVE 5 MM) 17. DEFECTIVE CR COILS (0.4 MM) 18. DEFECTIVE CR COILS (0.5 MM) 19. DEFECTIVE CR COILS (0.63 MM) 20. DEFECTIVE CR COILS (0.8 MM) 21. DEFECTIVE CR COILS (1.0 MM) 22. DEFECTIVE CR COILS (1.25 MM) 23. DEFECTIVE CR COILS (1.6/1.8 MM) 24. DEFECTIVE CR COILS (2.0 MM) 25. DEFECTIVE CR SHEETS (0.4MM) 26. DEFECTIVE CR SHEETS (0.5 MM) 27. DEFECTIVE CR SHEETS (0.63 MM) 28. DEFECTIVE CR SHEETS (0.8 MM) 29. DEFECTIVE CR SHEETS (1.0 MM) 30. DEFECTIVE CR SHEETS (1.25 MM) 31. DEFECTIVE CR SHEETS (1.6/1.8 MM) 32. DEFECTIVE GP SHEETS (0.35 MM) 33. DEFECTIVE GP SHEETS (0.4 MM) 34. DEFECTIVE GP SHEETS (0.5 MM) 35. DEFECTIVE GP SHEETS (0.63 MM) 36. DEFECTIVE GP SHEETS (0.8 MM) 37. DEFECTIVE GP SHEETS (1.0 MM) 38. DEFECTIVE GP SHEETS (1.25 MM) 39. DEFECTIVE GP SHEETS (1.6 MM) 40. DEFECTIVE CHEQUERD PLATE (5 – 10 MM) 41. DEFECTIVE HR PLATES 42. DEFECTIVE PLATES (6 - 20 MM) 43. DEFECTIVE PLATES (ABOVE 20 MM) 44. DEFECTIVE UNDER SIZED PLATES (LENGTH 400 – 610 MM) 45. DEFECTIVE ELECTROLYTIC TIN PLATES 46. DEFECTIVE CRNO SHEET
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SEMIS
. MS ingots (Non – Silicon) . Pig iron. BF slag
. BF granulated slag (NTL) Coke Fraction
. Hard coke. . Mixed breeze coke. . Mixed coke. . Nut coke. Coal Chemicals
. CHT oil (AO + WO) . Extra hard pitch. . HP Naphthalene. . Anthracene oil. . Carbolic oil. . Light cresote oil. . Light oil. . Ammonium sulphate. . Crude o . Liquid ammonia. . Ammonium Nitrate (melt). . Ammonium Nitrate (Lump). . Nitric Acid. . Sodium Nitrate/ Nitric Acid. Waste Products
. Ferrous sulphate. . Liquid Argon. . Liquid Oxygen.
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. Liquid Nitrogen. . Used/Rejected refractory bricks. . Used/Rejected fire clay bricks. . Calcimined fire clay bricks. . Calcimined lime dust. . Lime dust (dump). . LD slag. . BF flue dust. . Cinder ash. . Tar sledge. . Used silica get. . Lime sludge. . Used/Rejected Manganese bricks. Uses of products
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MARKETING DEPARTMENT OF RSP
The marketing department of RSP was earlier called as the Order Department. It is only deal with the secondary product of RSP and the primary products of RSP’s is deal by the Central Marketing Organization (CMO). The Managing Director Mr. R.P Singh heads the marketing department of RSP, General Manager Mr. A.P mohanty and other executives are also in charge of the department. We can see the hierarchy of the Board of Directors and officers in the diagram below. There are four major departments under RSP as the Secondary Steel Stockyard, Iron and Steel Secondary, Coal & Chemicals Waste Products and Auction and Disposal. Earlier till 1974 the Central Marketing Department (CMO) was in charge of the marketing of the scrap products. Marketing of the defective products was also handle by the CMO till 1998, and though they are also responsible for the marketing of primary products RSP, they had produced primary products blindly due to that there was a huge increase in scrap and defective products. For that they have faced huge loss in end nineties. But later the individual plants were asked to handle the sale of secondary and the scrap products. During past few years the Marketing Department of RSP had a huge work force of employees. But due to modernization and introduction of the computer technology the work force have been reduce to less number of employees. Earlier the documents and important papers were kept in lockers and required 2 or 3 employees to maintain, this process make the entire sales process time taken and unsecured. But today the documents are stored in soft copies in computer system that makes more reliable, easy to access and increase the efficiency of the organization. After the implementation of “Single Window System” the work process is minimized. This system is a new system and it has been introduced in 1st April 2004 and for last two years it has been running successfully.
ORGANISATION STRUCTURE OF MARKATING DEPARTMENT OF RSP.
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MANAGING DIRECTOR Sri.R.P.Singh
ED (in charge) Sri.B.N.Singh
GM (marketing) Sri.A.P.Mohanthy
DGM (marketing) Sri.H.S.Dhiangra
SSSY Iron &steel Cool chemical, waste Auction disposal AGM (sssy) secondary product, AGM (mkt) Sri.P.Sen Asst. manager (mkt) SPP&defence Sri.A.Gupta Sri.R.Banjare Sen. manager (mkt) Sri.R.N.behera
Ju.executive (mkt) Sri.R.N.Panda
IDLE ASSETS CDY Sen. manager (mkt) Manager (mkt) Sri.U.K.Paul Sri.S.K.Behera
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MARKETING SECTION
Marketing section of RSP has four major sections they are as follows.
Auction and disposal.
Secondary Steel Stockyard
Iron and Steel Secondary.
Coal Chemicals, Waste Products, SPP
AUCTION AND DISPOSAL
This section is concerned with the auction and disposal of the scrap and ideal assets and also deals with the disposal of secondary products. The secondary products are nothing the scraps those are generated in the process of steel making. A lot of scraps is generated by capital repair, periodical repair, construction and changing of machineries and also due to technological obsolescence. These are to be disposed off either by utilizing it in plant or to be sold to avoid holding huge inventories as obsolete items. This auction and disposal deals with two with two sections.
1. Central Disposal Yard. 2. Idle Assets. Central Disposal Yard
Central disposal yard indicates the area where the materials of different shape and size declared as scrap of unserviceable or absolute are stored, The materials are collected from different units of plants as per Executive Director (Works) procedure order, these are collected daily basis and recorded in a registered called “DAY BOOK”. The scope of this procedure order is restricted to all arising of RSP except for those which are sold by marketing department to ancillary industries and unused arising of RSP’s own products.
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IDEAL ASSETS
The ideal assets can be defined as the assets, which have outlived its life. These are not economical viable. These assets have either gone obsolete due to change in technology, change in demand, and change in material or due to depreciation. Assets can be declared as ideal for the company by the department, which it belongs, when the department head- in- charge declared the assts are ideal. A committee is set for identifying the ideal assets should identify it, this committee is known as the “IDEAL ASSETS FIXACTION COMMITTEE”. The committee has a chairman, who is the rank of a general manager.
The selling of “IDEAL ASSETS” is also a very tough task for the company. For that Rourkela Steel Plant having a tie up with “Metallurgical & Engineering Consultancy India Limited” (MACON). The central disposal yard and idle assets have earned Rs.30 crores and Rs.20 crores. Per annum is the last fiscal year respectively. The target for this year has been set at Rs.20 crores and Rs.15 crores respectively.
SECONDARY STEEL STOCKYARD
The secondary steel stockyard is the main stockyard of RSP where the secondary products are kept for sale. It is constructed outside the grill gate along the Bisra Road with an initial investment of about 1.5 crores in the year 1991-92 and it came into operation on 02/03/1992. Subsequently, the yard has been expanded suiting to the requirement and necessity of RSP.
Allotment of materials at SSSY
Everyday SSSY sends the lists of plots/lots available for allotment .The plots/lots are fed to the computer. All the items and valid sale orders of those products are separately randomized through computer on that day and lists are generated. Based on random list the senior plot/lot of the senior . Item is allotted to the senior valid sale order . There are certain things , which are taken into account. After all the customers have been considered the next round for allotting materials is started.
The following aspects are checked through computer:
1. The concerned sale order should be valid w.r.t to expiry date, suspension of sale order, cancellation etc.
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2. The party should have submitted the revised price acceptance. 3. The sale order should be sufficient (i.e. minimum 10 tonne) for allotment of one wagon. 4. A unique SSSY no. is assigned (5 digits) to the materials on entry to the stockyard. 5. The materials coming through truck (10 tonnes) are allotted lot nos. that is of 4 digits. 6. The materials coming through wagons are more in quantity and are allotted plot nos. that are of three digits. 7. For entry of trucks into the stockyard identification of the driver, helper & R.C no. of the vehicle is required. 8. A private contractor is appointed for loading and unloading the material at SSSY. 9. After the payments have been made the release order is issued, which is a financial document of sale. This contains party name , award price , details, and last date of lifting . 10. Materials going out of SSSY, an invoice will be made-then dispatch advice will be given on which one can take out the material. 11. On the last day lifting the material DCR (delivery completion report) is issued for each lot, which come to the finance department. 12. This DCR is required for refunding EMD money to the customer.
IRON AND STEEL SECONDARY
Secondary steel products are generated during the process of primary products. It is generated at various pieces in the plants. More the production we do, more the secondary product we will get. These defective products cannot be visible in necked eyes, but they are defective products. The defective products are stored in the secondary steel stockyard and from there it is supplied to the different venders of RSP. This section deals with the marketing of IRON and STEEL secondary products generated in the process of steel making. • Defective • Re-rollable scrap • Melting scrap • Industrial scrap
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COAL CHEMICALS, WASTE PRODUCTS
The waste products generated is liquid oxygen, liquid hydrogen, rejected fire clay bricks, blast furnace flue dust, cinder ash and LD slag. Ferrous sulphate is a waste product that is generated from the cold rolling mill. It is base material for print industry. It is also used as manure for opium plants. LD slag another waste from SMS. It is the steel slag and it’s primary customer are south eastern railways. Fiue dust is also a kind of waste generated from the blast furnace. It is a mixture of iron dust and coke dust used in small iron factories, coke briquette plants etc. The following are the coal chemicals produced by the plant
1. Extra hard pitch 2. Hot pressed naphthalene 3. Anthracite oil 4. Light kerosene oil 5. Carbolic oil 6. Ammonium sulphate 7. Light oil
The coal chemicals are used as raw material for the manufacture of dyes, pharmaceuticals, insecticides, pesticides, flavors, perfumes, rubber chemical, carbon black tires, plastics and many more products.
AUCTION OF THE MATERIALS
The materials after getting their respective plot and lot numbers are placed for the auction. It includes the secondary and scrap products. For scrap items they are invited open tenders from the venders and for the secondary products they are taking the help of the Metaljunction.com, which is doing auction through, online. Before this online auction process they used to followed the “Order Booking System”, in this process 50% of the secondary product material is placed for auction to small scale Industries (SSI) of ORISSA, while the remaining 25% for open sale and 25% for
41 Online Marketing of Steel: A Case Study of Metaljunction.com registered traders. In this system the venders were not in a position to accept the material at any cost and RSP was forced to sale the less defective secondary product at a chipper rate. Due to limited capacity of stock RSP sale the chemicals at a very chip rate to the local venders. RSP still follow the open sale auction in some cases, If the secondary items are fails to make raise any demand then those material are sale through open auctions.
Terms and Conditions of Order Booking System
1. SSI auction – It refers to the Small-Scale industries in ORISSA. According to the rule passed by the Directorate of Industries of Orissa, 50% of the material should be kept for SSI. There was a security deposit of Rs 50,000 to take part in the auction and that amount will be adjusted from the material price. 2. Open Sale – It refers to all the parties through out the India, so that all the venders who are interested in auction can participate. The tender notice issued through leading newspapers, chambers of commerce ect. Those customers who bids in auction sale, they have to deposit Rs 50,000 as security before 7 days of the auction sale. 3. Registered traders – RSP adopted a policy of enlisted registered traders in the year 1976. During 1979- 80 to 1993 – 94 there was 59 registered traders. Again in 1994 – 95 another 58 traders were enlisted. For registered traders 25% of the total amount availability of the material is kept reserved, and the security of Rs 50,000. But now the system has changed completely. As it has mentioned that they are followed online auction to their secondary products. For this system Rourkela Steel Plant has to pay 1% as a commission to it. The system provide by metaljunction.com generates maximum revenue for Rourkela Steel Plant with least outlay of the materials. This system has been effect of use to RSP from the year 2003 – 04 . We can compare the revenue generation and sales of material by the old system with out metaljunction.com and the system of metaljunction.com (new system).
PRICING
The various categories of secondary products, which are homogenous in nature, are sold on a “Fixed price basic”. A high-powered standing pricing committee fixed the prices. MD constituted this committee; this committee plays a vital role because the customers are very much depend upon their decisions.
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While fixing the price of such scraps, a number of factors are taken into account by the pricing committee.
a) Marketed feedback from 5 RSP’s zonal officers located in New Delhi, Mumbai, Channai, Kolkota and Bangalore. b) Order position of individual items. c) Stock position of all the items in SSSY as well as in mills. d) Pricing of comparable items of sister steel plants. e) General feed back from market, including representation , if any receive from recognized bodies like Rourkela Chamber of commerce and industries , Rourkela. f) Bids received against plots/lots offered for sale through best offer.
The prices are revised periodically that is usually once every month taking into consideration the prevailing conditions, feed back from zonal Offices and feed back from the local market.
SALE ORDER / OFFER LETTERS
Sale order is issued in the name of the customer after receive the Earnest money deposit (EMD) is deposit. Offer letters were issued for only to Registered Traders, these offers were valid for a period of 10 days for in side ORISSA customers. The customers within the validity of the offer should submit all commercial formalities and all requisite documents.
SUSPENSION / CANCELLATION Suspension No suspension on dispatches is allowed under any circumstances after booking the sale order. In case of such instance, it will be presumed that the party is not interested to continue the sale order and such sale orders will stand cancelled. Cancellation No cancellation of sale order is allowed once the material is allotted. Cancellation should be done at least one day prior to allotment. For open sale orders cancellation of order is not permitted and in case of insistence, the PFA will be forfeited. Such cancelled plots will disposed off by open sale first, in case not disposed within 8 days, then through tender. In case of expiry of validity of sale order, the un serviced sale
43 Online Marketing of Steel: A Case Study of Metaljunction.com order may be extended at the discretion of RSP and accordingly notice is displayed to submit such request within stipulated period mentioned therein. Apart from the above a customer is free to cancel the regular sale order for any item and time. Now RSP has replaced the “Order Booking System” with Online Auction through “METALJUNCTION.COM” to sale their secondary products but follow the same channels for fixing the price of the secondary products.
METALJUNCTION.COM
Corporations across the world have realized that in a world without boundaries, certain regions and people with distinct competencies will be more efficient than others and therefore the visible trend in the world today is outsourcing. Companies are outsourcing manufacturing activities, customer services, back office operations and a host of other activities, either because there is someone else who can do the same thing for less, or, there is specialist who can offer service of higher quality. Industry has recognized that whilst it has to concentrate on growth, a prerequisite is to become globally competitive. Industry has to, on the one hand, concentrate on its core competencies of bringing about efficiencies in manufacturing and on the other hand look at bringing about efficiencies in their Supply Chain, which are their buying and selling Processes. The Re-engineering of the buying and selling processes would focus on reducing total purchase cost for goods and services procured and higher realization for the sale of finished goods and also include quicker process cycle times. The understanding of the above situation, led to the emergence of MetalJunction.com, a specialist in providing procurement services and selling services. Metaljunction.com focuses on Supply Chain Improvements through BPO and also through developing applications and offering them on an ASP mode to its clients. The scope of work envisages bringing about efficiencies to the entire Supply Chain, and emphasizes importance on both an online solution backed with a strong domain expertise. When the two leaders of the Steel industry in South Asia - Steel Authority of India Limited (SAIL) and The Tata Iron and Steel Company Limited (TATA Steel) decided to combine their strengths to launch a common e -commerce platform in 2000, to sale their secondary product, the foundation of Metaljunction.com had started.
44 Online Marketing of Steel: A Case Study of Metaljunction.com
Metaljunction.com private, Ltd (MJ) is a 50:50 joint venture of TATA Steel and SAIL. Founded in February 2001, it is today India's largest e-commerce company (with e- transactions worth Rs 9,131 crore) and runs the world's largest e-marketplace for steel. The steel supply chain in India has been transformed by the company, which has improved the efficiency, transparency and convenience with the way in which steel, especially secondary steel, is bought and sold. Metaljunction.com recently went global by signing on its first international client, NatFerrous of Singapore, and conducted e-sales of their ferrous and non-ferrous scrap. Profitable results delivered by metaljunction.com with transaction value growth of 250% (CAGR) since inception in 01.02.2001. In FY 05 the value of transactions of the company was in excess of Rs. 4200 crores which makes it the largest eCommerce Company in the country for the second year in a row. Furthermore having traded 2.3 million tonnes of Steel since its inception (and 1.2 million tonnes in the last 11 months) has made metaljunction.com the largest e - marketplace for Steel in the World. Over 3,500 buyers and scores of public sector and private sector companies today buy and sell products using the convenience, transparency and efficiency offered by metaljunction. In September 2005, metaljunction was awarded ISO 9001:2000 certification by Det Norske Veritas, Netherlands. The certification covers the quality management system standards of the company for e-sales, e-sourcing, channel financial services and software solution services. www.metaljunction.com • Provides e-selling services for the following materials:
o Steel
o Ferro alloys, minerals and metallic
o Non-ferrous metals
o Obsolete capital goods (idle assets) • Also provides e-selling services on a BPO mode. • Has sold 3 million tonnes for its clients, since inception up to September 30, 2005. • Provides finance to distribution channels / direct end users in association with leading banks. Has arranged finance of Rs 28.7 billion till September 30, 2005.
45 Online Marketing of Steel: A Case Study of Metaljunction.com
46 Online Marketing of Steel: A Case Study of Metaljunction.com
METALJUNCTION.COM AND RSP
Now RSP is doing their secondary stock marketing online through Metaljunction.com. Though Rourkela Steel Plant does not have the system of online auction facility they are going through this process.
Terms and Conditions for Online Auction:
In online auction every one can take participate in India, so there is a big chance of false registration, for that there are some conditions. . Before take participate in the auction the vender should deposit Rs 1,00,000 as security deposit that is called earnest money deposit (EMD). . After receiving the security the vender is eligible to get the ‘password’.
. All quotations submitted by the Supplier/his authorized agent/representative by logging on to the above web site for Enterprise Procurement System using the User Identification provided by the Service Provider and password by which the person logging into the Enterprise Procurement System is authenticated and filling up the structured on-line forms available against each Invitation to Tender, shall be considered as legal and binding documents having in all opinions the same legal validity as a physically signed quotation by the Tenderer/His authorized agent/representative.
. In the event of the Tenderer having submitted more than one quotation against an Invitation to Tender, only the latest quotation submitted by him shall be considered as the valid quotation for consideration of opening of the quotation and issuance of Acceptance of Tender by the company. All earlier quotations submitted in the Enterprise Procurement System shall be deemed to be superceded and invalid and will remain un-opened in the System and also not available for viewing the details by the Tenderer or the company or the Service Provider once the valid quotations against the said Invitation to Tender are
47 Online Marketing of Steel: A Case Study of Metaljunction.com
opened on the scheduled date and time by the company’s authorized representative.
. Once the quotations against an Invitation to Tender submitted in the Enterprise Procurement System are opened, the Tenderer/s shall be legally bound to honour the contract, which may arise out of the acceptance of the said quotation. In the event of non-acceptance of the contract so awarded and arising out of such quotations (including any subsequent confirmations on price, technical and commercial grounds from the Tenderer) the company shall have access to all and same legal remedies available for enforcement of the contract as available had the quotations been submitted by the Tenderer on paper attested with a signature of an individual so authorized.
. Once the quotations are opened, the Tenderer shall have no claim to withdraw the quotations on the grounds that he had not understood any part/total of the web posted Invitation to the Tender and/or that he had not submitted the quotations and/or that his user-id and password had been wrongly used by someone else not authorized by him and/or that the authority of the personnel who had been entrusted with the user-id and password had since ceased and/or that the prices, technical parameters and terms and conditions which are available on-line in the Enterprise Procurement System are not the ones that the Tenderer had submitted originally. The maintenance and security of the user-id and password is strictly and solely the responsibility of the Tenderer. The Company and Service Provider shall not be in any way responsible for the loss/misuse of the same.
. For any disputes arising during the course of submission of the quotations on- line or for any matters subsequent to acceptance of such on-line quotations, the method of settlement shall be through the process of Arbitration by a Sole Arbitrator appointed by the MD/Chief Executive of Steel Authority of India Limited, Rourkela Steel Plant.
. Legal Jurisdiction: Any Contract with the Company, arising out of the Enterprise Procurement System shall be deemed to have been formed entirely at Rourkela,
48 Online Marketing of Steel: A Case Study of Metaljunction.com
notwithstanding the place from which tender has been submitted. Subject to clause 7 above, legal proceeding shall be triable by the Civil Courts having territorial jurisdiction over Rourkela.
. We understand that the company and Service Provider disclaim all warranties and conditions, either express or implied, including, but not limited to, implied warranties or conditions of merchantability, fitness for a particular purpose, and non-infringement. We are also aware that problems related to bandwidth, connectivity etc., are beyond the control of company and Service Provider, and hence no responsibility can be taken by Company or Service Provider for the same.
. That the above transmission, retention and retrieval of Invitations to Tender, Submission of quotations by the Interested Tenderers etc will be handled through the Secure Servers of the Service Provider.
. That the Tenderer who will be participating in the above Enterprise Procurement System will be registering themselves with the Buyer/ Service Provider for obtaining the required User Identification and passwords for authentication for the Enterprise Procurement System, which thereafter will be maintained by the Tenderer’s authorized personnel.
. That after the said registration in the Enterprise Procurement System with the Service provider, the Tenderer will be able to Log on to the Enterprise Procurement System of the Service Provider and View, Download and see all the Invitations to Tenders, which are transmitted by the Company to them through the Enterprise Procurement System.
. That the Tenderer can thereafter, subject to their agreement to the terms and conditions stipulated for each of the Invitation to Tenders posted by the company, submit their quotations in the Structured Formats available for the purpose in the Enterprise Procurement System web site indicating the Prices, Taxes and Duties,
49 Online Marketing of Steel: A Case Study of Metaljunction.com
Freight and all relevant Technical and Commercial contractual information as applicable and desired by them.
. That once the Tenderer fills up the on-line forms for submission of quotations, the data contained in these forms will be stored in the Service Provider’s Servers in a secure encrypted form neither available or visible to any agency including the Service Provider or the company till the time and date of opening of the Invitation to the Tenders against which such quotations are submitted, or till such extended time and date of submission as may be indicated against the tender, subsequent communications at the discretion of the Company.
. That the Tenderer can during the time and date for which the Invitation to Tender is valid for submission of Quotations, submit fresh quotations in super cession of his earlier quotations, in which event the latest quotation submitted by the Tenderer only will be considered as Valid.
. That the quotations so submitted on-line through the medium of Internet will be opened on/after the scheduled opening date and time (including the extended date and time, if any) by an authorized officer of the company, at which time the quotations’ Bid part submitted by all Tenderers against the relevant Invitation to Tender will be available for Viewing in the Enterprise Procurement System by all the Interested Tenderers who have responded with a valid quotation to the said Invitation to Tender.
After receiver the above documents and terms signed by the vender, RSP give them the password; so that they can access and take participate in that auction.
PROCESS OF AUCTION
Rourkela Steel Plant starts the auction on every Tuesday, and it will start at 10.30 am for the convinance of the customer, and it will continue until biding of the last lot. The process will start 10 days before the start of the auction, so that the venders can verify the material for what they are going to bid. At the time of auction the screen will display the no of plots that are in the bidding process and display the plots number and size, so that the bidder can bid his
50 Online Marketing of Steel: A Case Study of Metaljunction.com required material. It will also display the no of bidders and one bidder can participate in more then one items. Maximum 30 minutes has been provided to all the lots that are display in the bidding items screen. The bid will comes to an end when they will get the highest bidder (H1). The bid will continue until get the H1 bidder and according to that the time will be automatically extended to 3 minutes. The auto extension will carries until get the H1 bidder. After the auction the highest auction price comes to the RSP’s marketing department, and there they are going to decide whether to sale or not. According to the guidelines they have their own better price for each items. The materials will be allotted to the bidders who bid for 90% or more than the better price. If the bid fall below the 90% of better price then the material is forwarded for the next auction in the next week. If in the next auction the H1 price is less then the better price then the better price has revised for the next auction. After receive the H1 bidder for that auction, the management held the meeting regarding the allotment of the material to the parties who has offered the highest price over and above the better price. After the meeting a sale order is released and sends to the customer who has bid the highest price above the better price, it is signed by the Managing Director of Rourkela Steel Plant.
PAYMENT PROCEDURE
After receive the sale order, which contains the detail information about the materials, vender name, and dispatch date, payment conditions. The customers are required to pay the amount of 102% of their value of material this is because of adjustment of amount if their is any extra quantity of material released to them else this amount will be refund to them, if they want to lift the material in small quantities then they have to deposit the amount of the first quantity and 5% of the second quantity for security, and that amount will be adjusted at the end of the last material lifting. The venders get some stipulated period for lifting the materials as followed.
. 10 Days for lifting - No penalty . Next 7 days with - 1% penalty . Another 7 days with - 3% penalty
CONDITIONS UNDER REFUND OF MONEY
51 Online Marketing of Steel: A Case Study of Metaljunction.com
The EMD has to pay by the customer to take part in the auction. Those who do not get any allotment for the material their EMD has refunded by RSP, But for those who got allotted of material but failed to make payment for them some penalties are their. The penalty will be charged to the total amount of material left in the stockyard. If the party fails to make payment in respect to the total amount of material, then the party will be banned for a period of 3 months to take any part in the online auction plus from the financial aspects 5% will be charged on the total lot value subject to Rs 1,00,000 and the rest amount will be refunded to the vender after deduct the 5% penalty. Advantage Of This System
More customers are created through this online auction. Since they can participate any where across India. Through this online auction Rourkela Steel Plant getting good price for their secondary products and it helps to create a good and healthy competition. Better consumer satisfaction because all the activities done under one roof that is called “Single Window System”. Through this they are able to generate very high revenue. This process is very useful as compared to order booking system.
SWOT ANALYSIS OF ROURKELA STEEL PLANT
Strength 1) RSP has a dedicated and hardworking team on the marketing. 2) RSP marketing network’s is very much efficient in marketing the secondary products. 3) RSP has a very large secondary steel stockyard of 80,000 sq.mts, which has all the facilities that helps the stocking, and delivering of secondary products made easy. 4) The computer networking system use by the RSP is one of the best system in the industry, it make-work easy. 5) Metaljunction.com/ on line marketing system adopted by RSP is one of the biggest strength of RSP marketing 6) RSP most production unites are ISO 9001 certified which helps increasing customer confidence, and improve efficiency effectiveness. 7) Single window concept adopted by SSSY
52 Online Marketing of Steel: A Case Study of Metaljunction.com
53 Online Marketing of Steel: A Case Study of Metaljunction.com
Weakness 1) Lack of internal customers orientation inhabits implementation of plans to a substantial extent. 2) Near of RSP there are less number of cement industry so RSP can not sale their BF granulated slag s. 3) RSP dose not compromise much on the reserved price fixed for the secondary products due to many material remain blockade and day by day there value depreciate Opportunity 1) In the globalizations world there huge demand of steel for the nation infrastructure development. 2) Increase demand of steel at the international level that has raised hopes for the export of steel from India. 3) Due to economic booming many small-scale industry are open now a days, so for that small industry are more demand steel from SAIL. Threat Due to open economy public sector are facing moor competitors in there marketing fields likewise TATA, JINDAL, ESSAR, MUKUND, NIPPON,ELIGEN STEEL, Etc, those are provide goods in lower cost. 1) Good qualities of coals are not available in India. for that SAIL depends upon other country’s. 2) The use of plastic and aluminums as substitute for steel is posing a major threat of steel industry.
SUGGEESTION
54 Online Marketing of Steel: A Case Study of Metaljunction.com
Considering all the facts I think there most be changes in policy of RSP. Some of the suggestions are given below.
The marketing strategy of RSP should circular depended upon customers satisfaction, so it is most improve. The security deposits of 105% should be reduced to 101%-103%, as the variation in quantity of the allotted materiel during lording is minimum. The practice just in time delivery should be thoroughly internationalized to gives RSP the strength to grow under the competitive scenario. The dispatch destination with the railway in this regard should be given priority. Customer database to develop incorporating product wise / zone wise requirement. RSP should be developed their seal’s promotion for that customer attract towards to the RSP. It should look after the growth of small-scale industry’s, which depends on the secondary products from RSP. RSP should develop their production units so that it will help to reduce productions of secondary products and produce more primary products. It should tray to reduce inventories and need proper planning and scheduling.
55 Online Marketing of Steel: A Case Study of Metaljunction.com
CONCLUSION
In present era companies cannot sustain without competitiveness. If the company has six- sigma efficiency then only it can survive in the competitive markets. In the steel industry effective, efficient and competitive players are TISCO, JINDAL, and JVSL etc.
Rourkela steel plant has completed four decades; during this period there has been a complete shift, moving from a monopolistic state to a totally competitive markets environment. Over the year many changes were initiated. It being the pioneer in production of wide varieties of irons & steel also produces diversified varieties of secondary arising during the production process. RSP caters to a varied and wide spectrum of consumers. There is hardly any industry, which does not uses its products either directly or indirectly. Customers are the beginning and all business pursuits. Total satisfaction of costumer’s requirements in all aspects is there for the key of success of any business or any organization. Hence, RSP now aims at devoting it’s emerging towards producing quality and creating value to the costumers.
The analysis of present system thus shows that RSP has well managed marketing policies keeping the markets secondary products the customer mind. The system has come with process like online forward auction, and single windows system. Customer satisfaction is one of most important aspects of marketing and detailed studies of present marketing system clearly depict this. The effectiveness of the system is undoubtedly much more than the earlier system. The technological advancement adopted is also much more fruitful. The study of marketing department clearly shows that any section of the department cannot be ignored, even if it is marketing of secondary products. Thus, batter sales can be generated from the secondary products also.
56 Online Marketing of Steel: A Case Study of Metaljunction.com
BIBLIOGRAPHY
www.sail.co.in www.metaljunction.com www.steelworld.com www.google.com www.netscept.com Newspapers Sail diary
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