TISCO

A PROJECT REPORT
ON

Steel Industry
OF

Tata Iron & Steel Co.

Submitted To: Group Members: 10301138) 10301127) 3. JEMY JOHN. 10301120) 4. A.M SAMSUDEEN. 10301141) 5. R. ABDUL HAKKIM. 10301101) 6. RATHANA SABAPATHY. 10301140) 7. M.S. ASHWIN KUMAR. (REGNO: 10301107)
Vaels institute of busSiness administration

MR

V. DHANRAJ. 1. RAKESH ROY. (REGNO: (REGNO:

2. M. MOHAMMED MUZAMMIL

(REGNO: (REGNO: (REGNO: (REGNO:

TISCO
8. VIJENDAR KUMAR SINGH. (REGNO: 10301154) 9. T. RAJESH 10301137) (REGNO:

Table of Contents:
S.NO 1. PARTICULARS INTRODUCTION STEEL INDUSTRY COMPANY 2. 3. RATIO ANALYSIS SWOT ANALYSIS STEEL INDUSTRY COMPANY 4. PEST ANALYSIS STEEL INDUSTRY COMPANY 5. FUTURE STRATERGY PAGE NO

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INTRODUCTION: IRON AND STEEL INDUSTRY:

Iron and steel industry normally is a heavy industry. All its raw materials are heavy and massive. They encompass iron-ore, coking coal and limestone. Location of this industry is thus administered by its proximity to raw materials, predominantly coal. The finished products in turn are also heavy and need efficient transport system for their distribution. The chota Nagpur Vaels institute of busSiness administration

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plateau bordering west Bengal, Bihar, Orissa and Madhya Pradesh therefore has been the natural nerve centre of this industry. Iron and steel industry is also a basic or key industry. It forgoes the heavy machines and tools industry. Umpteen light, medium, small and cottage industries depend on it, as a result of modernization and industrialization of a country. As compared to China, India had an excellent beginning, with over 7.2 million tones, progress of iron and steel industry has been fairly sluggish. It was only in the last decade that the production had really gained vigor. Further, several measures undertaken by the government have enhanced the growth of the iron and steel industry in India. Some of the measures include low import duties, simple tax structure and unrestricted external trade. The social reforms introduced by the government improved the development process of iron and steel industries in India.

TATA IRON AND STEEL COMPANY:

Vision We aspire to be the global steel industry benchmark for Value Creation and Corporate Citizenship Tata Steel, formerly known as TISCO (Tata Iron and Steel Company Limited), is the world's fifth largest and India's largest steel company, with an annual crude steel capacity of 28 million tones. Ranked 315th on Fortune Global 500, it is based in Jamshedpur, Jharkhand, India. It is part of Tata Group of companies. Tata Steel is also India's second-largest and second-most profitable company in private sector with consolidated revenues of Rs 1, 32,110 crores and net profit of over Rs 12,350 crores during the year ended March 31, 2008. Its main plant is located in Jamshedpur, Jharkhand, with its recent acquisitions; the company has become a multinational with operations in various countries. In 2000, the company was recognized as the world's lowestcost producer of steel. The company was also recognized as the world's best steel producer by World Steel Dynamics in 2005. The company is listed on Bombay Stock Exchange and National Stock Exchange of India, and employs about 82,700 people (as of 2010). On 2nd April, 2007, the Company completed the acquisition of Corus Group plc, Steel Company headquartered at UK for an Enterprise Value of USD 14.7 billion. Post the acquisition of Corus, Tata Steel Group is now the worlds 6th largest steel company with current steel deliveries of 32 million tones. Set up as Asias first integrated steel plant and Indias largest integrated private sector steel company, a century ago, it is now the worlds second most geographically diversified steel producer, with operations in 24 countries and commercial presence in over 50 countries. The Jamshedpur operations in India is increasing its capacity from 5 mtpa to 10 mtpa by end

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2010 and the Company has also signed MoUs to set up four greenfield steel projects in the states of Jharkhand, Orissa and Chhattisgarh in India and one in Vietnam. Few years back, Tata Steel embarked on a journey to pursue Growth and Globalization through organic and inorganic strategy to increase its capacity in excess of 50 mtpa by 2015. The Company identified several strategic levers including building a stronger base in India, acquisitions in both growing and developed markets, strategic investments in raw material assets and focus on branding.

RATIO ANALYSIS OF TISCO:

LIQUID RATIO:
liquid asset / current liabilities
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The ratio is regarded as an acid test of liquidity for a company. It express the true working capital relationship of its cash account receivable, prepaid and notes receivable available to meet the company obligation. It establishes a relationship between liquid asset and current liabilities. An assets is liquid if it can be converted into cash immediately. We subtract inventory because it takes time to cash. Generally a quick ratio of 1 to 1 is to considered to represent a satisfactory current financial condition of company. As per Balance Sheet 31st March 2006,07,08,09 & 2010. (All figures are in crore.) Year LIQUID ASSET CL 2006 2007 2008 2009 2010 ANALYSIS The tata steel has high liquid ratio except (year 08-09 and 05-06), last year (09-10) it had above 1% ideal liquid ratio.These ratio show that if tata steel want to meet all obligation without selling their liabilities. It can meeteasly.andcompany has no solvency threat. 4237.60-1732.09 13701.89-1827.54 36962.44-2047.31 10268.09-2868.28 12246.69-2453.99 3808.72 5453.66 6768.78 8957.05 8999.61 RATIO 0.65 2.17 5.15 0.82 1.08

INVENTORY TURNOVER RATIO:

It is calculated to ascertain the efficiency of inventory management in term of capital investment. It show the relationship between the cost of good sold and the amount of average inventory.

net sales/inventory
Stock turnover ratio indicates whether the investment in inventory is optimum. The quantity of stock should be enough to meet the requirement of the business. As per Balance Sheet 31st March 2006,07,08,09 & 2010. (All figures are in crore.) Year Net sale inventory 2006 152155.0 Vaels institute of busSiness administration 21747.5 RATIO 7.00

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2007 2008 2009 2010 175510.9 196910.3 243157.7 250219.8 23329.8 26049.8 34804.7 30777.5 7.52 7.56 6.99 8.13

ANALYSIS :In the case of tata steel inventory turnover ratio is ok and in last 5 years it is around 7%.it shows efficient inventory management and efficiency of business operation

GROSS PROFIT RATIO:

Gross profit ratio indicates the difference between sales and direct cost.

gross profit /net sales x 100

A higher ratio is preferable, indicating higher profitability. As per Balance Sheet 31st March 2006,07,08,09 & 2010. (All figures are in crore.) YEAR GROSS PROFIT X 100 NET SALES 2006 8106.16 x 100 15132.09 2007 9183.47x 100 17452.66 2008 10935.88 x 100 19654.41 2009 12718.92x 100 24348.32 2010 12645.9x 100 24940.65 ANALYSIS In the case of tata steel, gross profit is high (>50%) , but last year it decrease compare to previous year gross profit. It may be because high operating cost like high raw material price etc. RATIO 53.56 52.60 55.64 52.23 50.70

DIVIDEND PAYOUT:
Dividend / profit after tax x100
Earning not distributed to shareholders are retained in the business. Vaels institute of busSiness administration

TISCO
The higher the dividendpayoutratio,it mean the less profits are invested back into the business to create future growth. As per Balance Sheet 31st March 2006,07,08,09 & 2010. (All figures are in crore.) YEAR DIVIDEND X 100 PROFIT AFTER TAX CURRENT RATIO 2006 820.43 x 100 3506.38 23.4 2007 1104.33 x 100 4222.15 26.15 2008 1393.55 x 100 4687.03 29.73 2009 1492.50 x 100 5201.74 28.69 2010 878.4 x 100 5046.80 17.4 ANALYSIS In case of tata steel dividend payout ratio is not high and it is decreasing compare to current year with its mean company invest back profit in order to create more growth of the company.

INTEREST COVER RATIO:

Interest cover ratio tell us the safety margin that the business has in terms of being able to meet its interest obligation. Higher interest cover ratio means that the business easily able to meet its interest obligation from profit.

EBIT / interest
As per Balance Sheet 31st March 2006,07,08,09 & 2010. (All figures are in crore.) YEAR EBIT INTEREST CURRENT RATIO 2006 2007 2008 2009 2010 ANALYSIS In the case of tata steel interest cover ratio is decreases every year very fastly if this is going like this in future also than its a matter of concern. 52399.60 62616.50 70663.60 73156.10 72143.00 1745.10 2512.50 9290.30 14895.00 18481.90 30.02 24.92 7.60 4.91 3.90

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Because when a company interest coverage ratio is 1.5 or lower, its ability to meet interest expanses may be questionable.

NET PROFIT RATIO:

net profit after tax / net sales x100
Net profit ratio is the ratio of net profit (after tax) to net sales. Net profit is used to measure the overall profitability and hence it is very useful to proprietor As per Balance Sheet 31st March 2006,07,08,09 & 2010. (All figures are in crore.) YEAR NET PROFIT AFTER TAX X100 NET SALES 2006 2007 2008 2009 2010 ANALYSIS In the case of tata steel net profit is going down in last 4 year .it is because Net sale is increasing very slowly .( net sale is decreasing because of low demand, global competition ) 3506.38 x 100 4222.15 x 100 4687.3 x 100 5201.74 x 100 5046.80 x 100 15139.39 17551.09 19693.28 24315.77 25021.98 RATIO 23.04 24.06 23.80 21.39 20.17

RETURN ON TOTAL ASSETS:

This ratio is calculated to measure the productivity of total assets This ratio is considered an indicator of how effectively a company is earning its assets to generate earning before contractual . Obligation must be paid.

Net profit after tax/total assets X100

As per Balance Sheet 31st March 2006,07,08,09 & 2010. (All figures are in crore.) Year Net profit after tax x 100 total assets 2006 3506.38 x 100 Vaels institute of busSiness administration 14617.16

Ratio 23.99

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2007 2008 2009 2010 ANALYSIS In the case of tata steel return on total asserts is decreasing every year. It show that company productivity is declining every year over their total assets. 4222.15 x 100 4687.3 x 100 5201.74 x 100 5046.80 x 100 25597.50 47075.52 58741.77 64232.78 16.49 9.96 8.85 7.86

DEBT EQUITY RATIO:

Total long term debt / shareholder fund
Debt equity ratio is ascertained to determine long-term solvency position of accompany. This describe the lenders contribution for each rupee of the owners contribution is called debit equity ratio. As per Balance Sheet 31st March 2006,07,08,09 & 2010. (All figures are in crore.) YEAR TOTAL LONG TERM DEBT SHAREHOLDER FUND 2006 2516.15 9755.30 2007 9645.33 14096.15 2008 18021.69 27300.73 2009 26946.18 30176.26 2010 25239.20 36961.80 ANALYSIS In the case of TATA STEEL lender contribution is more than 50% .( last 4 year) in year 05-06 it is only 0.26% .Increase in debt equity ratio may be because of tata steel expansion plan. RATIO 0.26 0.68 0.66 0.89 0.68

FINANCIAL EXPENSE RATIO:

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Financial Expense /Net Sales X 100
As per Balance Sheet 31st March 2006,07,08,09 & 2010. (All figures are in crore.) YEAR FINANCIAL EXPENSE X100 NET SALES RATIO 2006 2007 2008 2009 2010 ANALYSIS In the case of TATA STEEL financial Expense is increasing every year. In 05-06 It is only 1.1% but in 09-10 it increase upto7.4% . This is because of increase in Interest ratio. which company have to pay. 168.44 X100 251.25 X100 929.03 X100 1489.50 X100 1848.19 X100 15132.09 17452.66 19654.41 24348.32 24940.65 1.11 1.44 4.73 6.17 7.41

FIXED ASSET RATIO:

This ratio establishes the relationship between fixed assets and long term funds or capital employed.

FIXED ASSETS/CAPITAL EMPLOYED

The ration should not generally be more than 1. An ideal fixed assets ratio is 0.6. As per Balance Sheet 31st March 2006,07,08,09 & 2010. (All figures are in crore.) YEAR FIXED ASSETS CAPITAL EMPLOYED 2006 9865.05 14617.16 2007 11040.56 25597.50 2008 12623.56 47075.52 2009 14482.22 58741.77 2010 16006.03 64232.78 ANALYSIS RATIO 0.67 0.43 0.27 0.24 0.25

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In the case of tata steel current and last year fixed assets ratio is less than ideal fixed assets ratio . It indicate that portion of working capital has been financed by long term funds

WORKING CAPITAL TURN OVER RATIO:

SALES/CA-CL
Working capital ratio measure the effective utilization of working capital. It also measure the smooth running of business. As per Balance Sheet 31st March 2006,07,08,09 & 2010. (All figures are in crore.) YEAR NET SALES CA-CL 2006 2007 2008 2009 2010 ANALYSIS In the case of TATA STEEL all years except 07-08 sales is higer than working capital. This indicates over trading and smooth running of business . In 2009 and 2006 TATA STEEL has higher ratio which indicate lower investment of working capital and more profit 15139.39 17551.09 19693.28 24315.77 25021.98 428.88 8248.23 30193.66 1311.04 3247.08 RATIO 35.30 2.13 0.65 18.55 7.70

ADMINISTRATIVE EXPENSES:
ADMINISTRATION EXPENSES / NET SALES X 100
As per Balance Sheet 31st March 2006,07,08,09 & 2010. (All figures are in crore.) YEAR ADMINISTRATION EXPENSES X 100 NET SALES 2006 2007 2008 2009 2010 8419.40 X 100 9413.80 X 100 12605.70X 100 14742.50 X 100 16173.30 X 100 152155.00 175510.90 196910.30 243157.70 250219.80

RATIO 5.53 5.36 6.40 6.06 6.46

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ANALYSIS In the case of tata steel administrative expenses in not high in last 5 year and it is between 7-5%.

OPERATING PROFIT RATIO:

OPERATING PROFIT / SALES X 100
It is the ratio of profit made from operating sources to the sales. It show the operation efficiency of the firm and is measure of the managements efficiency in running the routine operation of the firm. As per Balance Sheet 31st March 2006,07,08,09 & 2010. (All figures are in crore.) YEAR OPERATING PROFIT X 100 SALES 2006 2007 2008 2009 2010 ANALYSIS: 62423.4 x 100 74842.9 x 100 83991.1 x 100 97785.1 x 100 101456.7 x 100 152155.0 175510.9 196910.3 243157.7 250219.8 RATIO 41.03 42.64 42.65 40.21 40.55

In the case of Tata steel operating profit ratio is medium .In last 5 year it is around41% this show operation and management efficiency of Tata steel

RETURN ON SHARE HOLDER FUNDS:

This ratio determine the profitability from the shareholder point of view.

Net profit after interest and tax / share holders funds x 100
As per Balance Sheet 31st March 2006,07,08,09 & 2010. (All figures are in crore.) YEAR NET PROFIT AFTER INTEREST AND SHAREHOLDERS TAX X 100 FUNDS 2006 3506.38 X 100 9755.30 Vaels institute of busSiness administration

RATIO 35.94

TISCO
2007 2008 2009 2010 ANALYSIS: 4222.15 X 100 4687.03 X 100 5201.74 X 100 5046.80 X 100 14096.15 27300.73 30176.26 36961.80 29.95 17.17 17.24 13.65

In the case Tata steel shareholder fund is increasing every year and going towards high rate of return on shareholder fund which indicate that a company is profitable and has more profit available for shareholder.

DEBTOR TURNOVER RATIO:

total sale / closing debtor
Debtor turnover ratio measures the number of time the receivable are rotated in year in term of sales. The ratio also indicates the efficiency of credit collection and efficiency of credit policy.
Debtor's turnover ratio shows how long people normally take to pay a firm for purchases on average. An investor may want to compare debtor's turnover ratio to the actual credit policies a firm has when selling items on credits.

As per Balance Sheet 31st March 2006,07,08,09 & 2010. (All figures are in crore.) TOTAL SALE YEAR CLOSING DEBTOR 2006 2007 2008 2009 2010 ANALYSIS 15215.5 17551.09 1969.103 24315.77 25021.98 539.40 631.63 543.48 635.98 434.83

RATIO 28.20 27.79 36.23 38.23 57.54

In case of tata steel debtor turnover ratio is very high .which show higher efficiency of a firm on collecting receivable. In last 5 year it is double( from 28.20 to57.54).

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It show tata steel good credit policies when selling item on credit.

STOCK TURNOVER PERIOD:

This is related to time

Day or month in the year / Inventory turnover ratio.

The stock velocity convey that an average every item of stock remain in the store before it sold. As per Balance Sheet 31st March 2006,07,08,09 & 2010. (All figures are in crore.) YEAR DAY OR MONTH IN THE INVENTORY TURNOVER YEAR RATIO 2006 365 Days 7.00 2007 365 Days 7.52 2008 365 Days 7.56 2009 365 Days 6.99 2010 365 Days 8.13 ANALYSIS In the case of TATA STEEL stock turnover is ok because its stock is nearby 50 days and if supply of raw material is stopped for any reason company can handle this situation easily . DAYS 52 49 48 52 45

DEBTORS COLLECTION PERIOD:

Day or month in the year / Debtors turnover ratio
As per Balance Sheet 31st March 2006,07,08,09 & 2010. (All figures are in crore.) YEAR DAY OR MONTH IN THE YEAR DEBTORS TURNOVER RATIO 2006 2007 2008 2009 2010 ANALYSIS Vaels institute of busSiness administration 365 Days 365 Days 365 Days 365 Days 365 Days 28.20 27.79 36.23 38.23 57.54

DAYS 13 13 10 10 6

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In the case of tata steel debtors collection period is improved very fastly. In 05-06 it is 13 days but now (09-10) it is only 6 days. It convey quick payment on the part of Debtors.

PRICE EARNING RATIO:

A valuation ratio of a company current share price compared to its per-share earning

Market value per share / Earning per share

The price earnings ratio is widely used by the security analysts to value the firms performance as expected by investor. It indicates investors judgments or expectation about the firms performance. This ratio is of use to prospective investor to decide whether to invest in the equity shares of company at a particular market price or not As per Balance Sheet 31st March 2006,07,08,09 & 2010. (All figures are in crore.) YEAR MARKET VALUE PER SHARE EARNING PER SHARE 2006 2007 2008 2009 2010 RATIO

536 507 697 206 632

63.35 73.17 67.17 69.45 60.26

8.47 6.89 10.38 2.97 10.50

ANALYSIS:

In case of tata steel 2010 price earnings ratio is high in last 5 year. In 2009 it is 2.97 which is lowest ratio in last 5 year. This because of global recession (so demand is low) By seeing last year ratio tata steel performance is Goodland. It is good for investors to invest in tata steel share
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CURRENT RATIO:
Current Assets / Current Liabilities

This ratio is regarded as a test of liquidity of company. It express the working capital relationship of current assets available to meet the company current obligation . As per Balance Sheet 31st March 2008 & 2009. (All figures are in crore.) YEAR 2006 2007 2008 2009 2010 CURRENT ASSET 4237.60 13701.89 36962.44 10268.09 12246.69 CURRENT LIABILITIES 3808.72 5453.66 6768.78 8957.05 8999.61 RATIO 1.11 2.51 5.46 1.15 1.36

The ideal current ratio at 2:1 or more is considered satisfactory. ANALYSIS In the case of tata steel current ratio is high in year 07-08 due to loan and advance and low in 05-06 (1.11). In last financial year it is 1.36 which is low compare to ideal one which mean it is not satisfactory to meet current obligation.

CAPITAL TURNOVER RATIO

SALES / CAPITAL EMPLOYED
As per Balance Sheet 31st March 2008 & 2009. (All figures are in crore.) Vaels institute of busSiness administration

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YEAR 2006 2007 2008 2009 2010 SALES 15139.39 17551.09 19693.28 24315.77 25021.98 TOTAL CAPITAL EMPLOYED 14617.16 25597.50 47075.52 58741.77 64232.78 RATIO 1.03 0.68 0.42 0.41 0.39

ANALYSIS:

In the case of tata steel current ratio is high in year 07-08 due to loan and advance and low in 05-06 (1.11). In last financial year it is 1.36 which is low compare to ideal one which means it is not satisfactory to meet current obligation.

PROPRIETARY RATIO
This ratio indicates the proportion of total funds provide by owners or shareholders

Shareholders Funds/Shareholders Funds + Long term loans

This ratio shows the general soundness of the company. A high ratio indicates safety of the creditors and a low ratio show greater risk to the creditors A ratio below .5 is alarming for the creditors. As per Balance Sheet 31st March 2008 & 2009. (All figures are in crore.) YEAR 2006 2007 2008 2009 2010 Shareholders fund 9755.30 14096.15 27300.73 30176.26 36961.80 Shareholders fund+ long term loan 12271.45 23741.48 45322.42 57122.44 62201 RATIO 0.79 0.59 0.60 0.52 0.59

ANALYSIS

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In the case of tata steel proprietary ratio is more than alarming line (0.5) Every year it change. In 2006 it is 0.79, but in 2010 it come down upto 0.59 At present there is no threat to creditors

SWOT ANALYSIS: IRON AND STEEL INDUSTRY:

Strengths:
Availability of iron ore and coal in bulk quantity. Low cost efficient and abundant labour. Strong managerial capabilities. Modern new plants and modernized old plants.

Opportunities:
Unexplored rural markets. Rapid urbanization. Growing domestic demand and increased level of exports. Indian steel producers looking for overseas acquisitions in steel as well as raw materials. Strong growth in steel heavy industries e.g. the automotive industry and within the infrastructure. Increasing interest of foreign steel producers in India. The improvement in the economic recession in the West, the potential for a growing demand is high.

Weaknesses:
Dependence on imports for steel manufacturing equipments and technology. Low R&D investments . Inadequate infrastructure. Slow statutory clearance for development of mines.

Threats:
Slow growth in infrastructure development. Vaels institute of busSiness administration

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Market fluctuation and increase in Chinas export possibilities. Global economic slowdown. Higher duties and taxes CSR related issues: increased focus on the environment and labor condition

TATA IRON AND STEEL COMPANY:

Strength
Mineral Reserves: Tata Steel has two collieries in West Bokaro and Jharia, in the state of Jharkhand. Tata Steel Limited also has a manganese mines and dolomite quarries in Orissa. The company in India is having mines of 281 million tones reserves in its mines in Jharkhand and thus having minerals to cater its needs for more than 20 years.

Management Team: Tata Steel has a highly credible management team who has displayed their skills in expanding the company through inorganic route. The company has successfully acquired Nat Steel of Indonesia, Millennium Steel of Thailand and more importantly Corus.

Information Technology: The entire mining operation of the Company is safe guarded against accident occurrence. Proactive measures are undertaken to ensure the employee's health and productivity through ergonomically designed work stations and by protecting them from occupational hazards.

Brand value: The TATA brand owing to its highly ethical and a socialistic approach to business have made its name synonymous to trust.

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Weakness:
High attrition rate: Tata Steel has traditionally faced the brunt of high attrition rate. In its Jamshedpur plant many engineers constantly change their jobs to SAIL in Bokaro and vice-versa.

Degradation in brand value owing to job losses: TATA group has made its name synonymous to job security of it employees. But the shutdown of its plants in the UK and The Netherlands will dent its image to a certain extent. As a result of which around 1600 employees would lose their daily livelihood.

Low cost recovery: There are specific products like the aerospace steel and cast products which has received feeble response in the past. The company has failed to recover costs in this business front.

Laggard in technological front: Companies like SAIL has efficiently introduced the XRF (X-Ray Fluorescence) in its plants at Durgapur and Bokaro over 12 months back which the Tata Steel has failed to do

Opportunities.
Competitive position of the company: Tata Steel is the second largest producer of steel in India and the sixth largest producer in the world.

Opportunities in the field: India has geared up for rapid expansion in the field of infrastructure. The Government of India (GoI) has earmarked Rs.1, 70,000 crore for Infrastructural spending for the fiscal year 2010- 2011 and the trend is set to Escalate up to the fiscal year 2025 when India is slated to become the third Largest economy in the world.

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Opportunities for demand of higher prices: The demand for steel is on a rise both domestically and internationally as a result of the enhanced focus upon infrastructural development.

The movement of Tata Steel in the value chain front:

India is the only country in the world where steel can be made cheaper and there is consumption. Then there are other countries like Ukraine, Iran, Brazil, Australia and Bangladesh where steel can be made cheap because of the availability of iron ore and coal.

Threats: Resources to cushion the from business environmental change: Tata Steel is a company floated by Tata Sons whose assets are valued at around 108 billion USD and thus the company has enough reserves tocushion itself from market fluctuations.

Regulatory norms: The government of India has chalked a strict norm for the clearance of a plant through environmental impact assessment (EIA). To get clearance from the concerned authority demands more than eight months thus leads to delay and project cost escalation.

Decrement in the sales volumes: Some of the Tata Steel products(like aerospace steel) have witnessed a severe reduction in sales and as a result of which the production facilities of the company in the UK and The Netherlands is facing the brunt of shut down.

Brand equity of the products: Tata Steel brand is a very powerful one, can only take a product very far. Beyond that it will be necessary for the product to strike ahead with its own brand.

PEST ANALYSIS: IRON AND STEEL INDUSTRY:

Political Analysis Vaels institute of busSiness administration

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Political stability, trade regulations, tax policies, industrial safety and environmental regulations, employment laws, IP rights

Economic Analysis

Economic growth, inflation rate, interest rates, exchange rates, labor costs, government expenditure, consumer spending

Social Analysis

Demographics, consumer behavior, leisure interests, income distribution, living standards, health consciousness, fashion & lifestyle changes

Technological Analysis Technological developments, new inventions, automation, information technology

TATA IRON AND STEEL COMPANY:

POLITICAL FACTORS FUNDING,GRANTS AND INITIATIVE REGULATORY BODIES AND PROCESSES:

Steel sector is regulated by ministry of steel, government of India headed by shri ram vilaspaswan. Functions are:
a) Prepare and implement an action plan for achieving the strategic goal of 110 MPTA of

steel production by 2019-20 b) Prepare and implement road map for technological and productivity improvements benchmarking them to global standards
c) Provide an single-window clearance for large projects, to be followed by statutory

clearances by the concerned ministries. d) Monitor the implementation of the national steel policy Vaels institute of busSiness administration

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Trade policies:

ECONOMICAL FACTORS:

GLOBAL SCENARIO

I) The major steel producing countries recording a double digits growth rate, global steel output registered a strong growth rate of 15% in 2010 over The previous year. The growth in steel production led to a robust demand for raw material such as iron ore and coking coal.(business line march 18th page 2)

II) China remaind the world largest crude steel producer in 2007 also followed by japan and

USA India occupied the 5th position for the second consecutive year

DOMESTICS SCENARIO The Indian steel industry have entered into a new development stage from 2008-09 riding high on the resurgent economy and raising demand for steel. Rapid raise in production has resulted in india becoming the 5th largest producer of steel. SOCIAL FACTORS: Labour related issues: Major events and influences- below mentioned are some of the initiatives introduced by tata steel which were later incorporated by the factory act 1948. 1. 8 hours working day 2. Establishment of welfare department Vaels institute of busSiness administration

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3. Leave with pay

Media views:
Media highlights all the pros and cons of the industry. It is reactive of all actions done by the industry. It is not only praises the social corporate responsibilities and other ethical value followed by the industry but also highlight the darker sidemost of the of the industry. Brand and technological image: The industry is proud of contribution that steel makes to the modern society. It is indispensable in the welfare of mankind. However recent survey indicates that most of the population is ignorant of the contribution that steel makes to the society. Ethical issues: Think ethical, think the TATA way this line aptly reflects the ethical culture that has been established in the industry by TATA steel. In an industry which as been criticized for exploiting labour as well as the natural environment, tata steel has shown how and why the industry should be responsible towards all its stakeholders TECHNOLIGICAL FACTORS: COMPETING TECHNOLOGY DEVEOPMENT With globalization and an increasing sale of operation, technological self-reliance has became a necessity. In keeping with global ethics of intellectual properties, it has became necessity for steel companies to have their own resources of research and development REPLACEMENT TECHNOLOGY Technological development in core industries like steel consume lot of resources so that researches try and invent technology which would have significant life span. MATURITY OF TECHNOLOGY: A) B)
C)

Reducing the intensity of steel Enabling transfer of technology to revamp and improve the energy efficiency of out date steel plants Investing in breakthrough technology for long term solutions.

EXPORT POLICY: A) Duty on coking coal fully exempted. Vaels institute of busSiness administration

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B) The customs duty on primary steel and ferro-alloys stainless steel has been reduced by 7.5% to 5% C) The duty on seconds and defectives of steel reduced from 20% to 10%
D) Export duty has imposed on iron ores and concentrates at rs300 per tonne and

on chrome ore and concentrates at rs2000 per tone.

IMPORT POLICY: A) Advance licensing scheme allows duty free import of raw materials for exports.
B) Imports of seconds and defectives of steel are allowed only through three

designated ports of Mumbai, Calcutta and Chennai. C) Mandatory free inspection certificate by a reputed international agency for every import consignment of seconds and defectives. D) Reduction in customs duty of melting scrap of iron or steel E) Custom duty on iron or steel melting scrap cut from 5% to nil.
F) Reductions in customs duty of aluminum scrap has been reduced from 5% to

nil

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FUTURE STRATERGIES:
Currently, the global steel industry is going through unprecedented times. The steel

demand is strong with over 6% growth year on year over the last seven years unseen in the last several decades
Oil prices and ocean freight rates are at an all-time high. The combined effect of all these

have driven steel prices to a level higher than ever before though there is increasing pressure on margins of steel companies due to very high input costs.
The Company has co-created a shared Vision with its employees of becoming a global

benchmark in Value Creation and Corporate Citizenship. Company has set goals for2012 in terms of Returns on Invested Capital, Safety, Carbon dioxide emissions and of becoming the employer of choice in the industry.
The integration with Corus is proceeding smoothly and is yielding better than the

predicted results. Continuous improvement projects are being given focus in all companies sitesand businesses.
Greenfield projects in India are progressing, though somewhat slower than planned.

Companys effort to enhance their raw material security has yielded positive results in Ivory Coast for iron ore, in Mozambique for coal and in Oman for limestone. There is greater emphasis on safety.
The Tata Steel Group will pursue strategic growth through capacity expansions and

securing access to raw materials. The Group is expanding its capacity in India through the expansion of its operations in Jamshedpur to 10 million tons per annum and through the construction of a 6 million tons per annum greenfield site in Orissa. Other Greenfield opportunities in India and across Asia are being assessed. The Group is also looking at further integration upstream in raw materials with an ambition to achieve 100%self-sufficiency in India and around 50% self-sufficiency in Europe over time.
Climate change is probably the biggest challenge ever to confront the steel industry. In

response to this challenge, the Tata Steel Group will be part of the solution and is committed to minimizing the environmental impact of its operations and its products. It has a goal to reduce its CO2 footprint by at least20% by 2020 compared to 1990. To meet this objective, the Group will, for example, continue to improve its current processes, invest in breakthrough technologies and develop new products and services that reduce the environmental impact over the product lifecycle. To improve its processes, priority is given to energy conservation schemes; in technology breakthrough such as Ultra Low Carbon Steel making and in other innovative projects where the Group has proprietary technology.

Vaels institute of busSiness administration

TISCO

Vaels institute of busSiness administration