Lahore School of Economics

SALES FORCE MANAGEMENT

Misrishah Scrap Chain

Field work 4

Submitted by:
Henna Bhatti
Muhammad. Ali Tahir
Alina Anwar
Amna Arshad

Submitted to:
Mr. Fareedy

Submission Date: 09th December 2016

Observation:

The process for the local scrap on each arat starts from the very basics, your homes, where

people use multiple products having tin or metal packaging, e.g. banaspati ghee, cans etc. and

many other teared and used metal scrap items that people often discard from their homes are

collected by Kabarias.

Kabarias are street hawkers who roam around in streets and go to shops, houses and many other

places where people have waste metal items that are to be discarded. They buy those items from

people from home to home and shop shop to minimal metal rates and depending on the time of

metal, e.g. if its tin cans the rates are slightly low i.e. are bought at a rate of 23/Kg while of solid

metal scrap e.g. people often discard items like chairs made out of steel or any other related

items are bought at a rate of 29/Kg. Kabarias arent only confined to buy metal products only,

they also buy plastic product and any other waste material that can go into recycling. After

buying these scrap items the whole day, at the end they sort out all the items into catagories and

pursue the respected scrap markets of each items. In this particular field work we will be

focusing on the metal/steel chain that goes into recycling to the arats and than to the furnaces for

further processing into bilot and ingot, after which the final product that is Steel rods, T Bar ,

Garders, and rolling pipes are formed for consumers to purchase.

Our Field work started from the scratch that is following the Kabarias who after buying from

homes went on to the main scrap item market that is misrishah, where they rom from arat to arat

to get the best rates to sell.

After the scrap items are collected from Kabarias by the Aratis they have bundle pressing

machines where they squeeze the scrap items in the form of bundles, to ease out the space in the
arat, and moreover the buyers that are the furnaces also prefer to buy bundles as it is easier for

their labor to throw the scrap into the furnace.

Kabarias are paid money in cash on the spot, as the amounts are not that huge the average

selling per Kabaria to an arat ranges between 1500-2800 PKR/day.

The Credit system:

All of the current market of metal scrap operates on long term credit system, i.e. they call the

payments parchis, on which the payments ranges between an average period 25-40/days day.

The major players in the current parchi market in steel market misrishah are razzak mushtaq &

rana butt who facilitate the parchi system, each of them charge 300PKR/lac on a cheque

payment, while charge 600PKR/lac on cash payemts.

According to two arats that we visited, the owners said the market moved to this system back in

1999, in the start the system seemed facilitating the process, but eventually its a kind of circular

debt, as you are being paid only parchi for material goods.

The Actual System:

The trucks that are bought by furnaces ranges in different types of scrap metal having different

price ranges. Some of the main type of local market scrap are:

1) Local Bundle
2) Pakora Scrap
3) Deghi Scrap
4) Boora Scrap

The most expensive two types being Pakora scrap which is also known as shredded scrap, and

deghi scrap that includes large metal ship breaking plates. These are expensive due to the nature

of steel, both of these types have very less impurities as compared to bundle and boora and have
very low carbon content which eventually is preferred by the furnaces because the production

output is dependent on the quantity of carbon content in the ra material. An average local market

truck contains scrap material ranging on the size of the truck i.e. minimum being 5 tons to 12

tons maximum.

Other Related Items:

In the furnaces not only steel scrap is used but two different types of chemicals are used that are :

1) Silicon
2) Maganesse

Both of these items are not produced in Pakistan and are purchased by the furnaces owners

and some market aratis from India, Dubai, and UK.

The Process of Local Market Scrap delivery to Furnaces:

1) Empty Truck is weighed on the Kanta i.e. The weighing Station.

2) The truck is loaded by labor on the arat.
3) The truck is weighed again.
4) A bill is generated on the Kanta having two copies, one going to the arati and one going

to the furnace where it is to be delivered. Before unloading in the furnace the truck is

weighed again and if any difference larger than 300Kg is charged to the arati.

The Import of Iron Scrap:

Import of scrap is mostly from South Africa, Europe, and Dubai. Because of very good quality

from overseas and competitive rates most furnaces are directly buying from overseas.

The process is simple which includes a bank which helps in acting as a liaison between the local

party and the foreign, and the payment is done through opening an LC Letter of credit.