A PROJECT REPORT ON ONLINE MARKETING STRATEGY OF ROURKELA STEEL PLANT at

SUBMITTED TO THE

Biju Patnaik University of Technology IN PARTIAL FULLFILLMENT OF THE DEGREE OF MASTER IN BUSINESS ADMINISTRATION BY Name : Bijay Laxmi University Regn.N0-0906289042 Under The Guidance of Name of Internal Guide Ms Nilima Das (Faculty Marketing,MBA)

TRIDENT ACADEMY OF TECHNOLOGY

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INTERNAL GUIDE CERTIFICATE

DEPARTMENT OF MASTER OF BUSINESS ADMINISTRATION This to certify that the project work titled MARKETING STRATEGY OF ROURKELA STEEL PLANT is a work of Bijaylaxmi (Regd. No.090628904) carried out in partial fulfilment of the requirements for awarding the degree in Master of Business Administration in Trident Academy of Technology under Biju Patanaik University of Technology (BPUT) during the academic year 2009-2011.

Prof. Partha Sarathi Das HOD, MBA TAT, BBSR Ms Nilima Das Faculty ,MBA, TACT, BBSR

Prof. J.K.Joshi Director Academics TAT, BBSR

EXAMINER CERTIFICATE

This is to certify that this piece of work entitled MARKETING STRATEGY OF ROURKELA STEEL PLANT submitted on partial fulfillment for degree of MBA is a record of studies and bonafied project work for degree of MBA is a work carried out by Bijaylaxmi, Regd no(0906289042), student of MBA programme 2009-2011 of Trident Academy of Technology, Bhubaneswar.

I wish her all success in life.

INTERNAL EXAMINER

EXTERNAL EXAMINER

DECLARATION
I do hereby declare that this project work entitled A detailed study of Marketing Strategy of Rourkela Steel Plant submitted by me for the partial fulfillment of the requirement for the award of Master In Business Administration (MBA) is a record of my own research work. The report embodies the finding based on my learning and surveillance and has not been submitted earlier for the award of any degree or diploma to any Institute or University

Place: Bhubaneswar N a m e: B ij a yl a

x m i Date:

ACKNOWLEDGEMENT
It is really a great pleasure to have this opportunity to describe the feeling of gratitude imprisoned in the core of my heart. I convey my sincere gratitude for giving me the opportunity to prepare my project work in Marketing Strategy Of Rourkela Steel Plant . I express thanks to all the staff members of Rourkela Steel Plant. I am thankful to Ms Nilima Das for her guidance during my project work and sparing her valuable time for the same. I am thankful to Head of The Department Prof.Partha Sarathi Das and other faculties of my department. I am also thankful to my family for their kind co-operation which made my take easy. my sincere

NAME : BijayLaxmi Regn.no : 0906289042

PREFACE
This project entitled MARKETING STRATEGY OF RSP is undertaken as a partial completion for my MBA in Trident Academy Of Technology. This project revolves around the process of how the secondary products are disposed off, in this project the system as a process for sale of secondary products is studied and gives a ready reference to one who is interested to take part in this auctioning process. The main purpose of this project is to sale the secondary steel products of Rourkela Steel Plant through online auction and how this process is helpful when compared to the previous system that is Order Booking System. During the production of prime products some scraps and defective items are generated. These are generally used by different small-scale industries for different purposes. Therefore these secondary products are to be marketed in various ways and to all

type of vendors, and it is very tough task for Rourkela Steel Plant to satisfy all the vendors by giving equal preferences 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.

TABLE OF CONTENT

Chapter No. 1.

Contents Declaration Acknowledgement Executive Summary Introduction Significance of the study Objective of the study Research design Research methodology Limitation of the study Company Profile Company overview Introduction of RSP Major units of RSP Secondary products of RSP Profile of organisatio n Organization structure of RSP Theoretical Framework o Marketing section of RSP o Online marketing system o Pricing strategy o Current status of company Presentation and Analysis of data Findings,Recommmendation Conclusion Bibliography Annexture

Page No.

2.

3.

4. 5.. 7. 8.

LIST OF TABLES

Table No. Table No. 2.1 Table No. 3.1 Table No. 3.2

Title of the Table Synopsis of Auction Catalogue Example For Payment System of Auction Performance of Direct Plan Sales From 2003-09

Page No. 38-39 44-45 49

LIST OF FIGURES

Figure No. Fig. No. 1.1 Fig. No. 2.1 Fig. No. 2.2 Fig. No. 4.1 Fig. No. 4.2

Title of the Figure Headquarter of SAIL Rourkela Steel Plant Units of RSP (COKE OVEN) Products With Their Applications Organizational Structure of RSP (MKTG)

Page No. 9 15 16 24 27

(INTRODUCTION)

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INTRODUCTION
This project consists of a detailed study of one of the important aspect of the Marketing . The project is all about the Marketing Strategy Of Rourkela Steel Plant being followed at Rourkela Steel Plant. It gives an idea regarding the the peril for its success as well;as the strategies it follows for marketing its product with greater customers satisfaction, quality control, less scrap,and better facility & Adaptability. This project covers the theoritical aspect of marketing strategies followed by Rourkela Steel Plant The project gives a scenic of the strategies taken up by RSP to become a giant among the steel companies of India ,as well as recommendation given after the research work is finished. The research was limited to the marketing strategies of RSP. Despite of certain limiting factors the research was succesfully conducted.

OBJECTIVES
Objective means the laying down the intention of any doings in advance. thus, the objectives of our study are : To find the view of customers on selling methods of secondary products adopted by RSP. To find the extent to which price affect the sales sales of secondary products. To find effectiveness of e-marketing to the customer. To find the procedures of e- marketing at RSP.

Research Methodology
An apposite methodology is the strength of character of any research work. A reasearch methodology is a means to analytically solve the research problem. It may be understood as a science of studying how research is done scientifically. A research methodology helps to expand comprehension regarding the methods/techniques of research and the logic behind the particular problem that is being taken up. Thus, when reasearch methodology is in question, it is not only the research methods but also the logic behind the methods that we take up in our process of research. It also includes the reason for taking up 11

a particular method and sarifice its alternative method so that the results are proficient enough of being evaluated by the researcher himself or by others. The accomplishment of any process depends upon the proper method adopted,and this project is completely collected through secondary data.

SECONDARY METHOD OF DATA COLLECTION:The study of marketing strategies, its management and the level of employee satisfaction at Rourkela Steel Plant is a descriptive one based on data collected through secondary data. the methodology adopted was systematic and scientific to some extent. Keeping in mind various circumstances and constraints the study was completed in an methodical and organized method.

Research Design
After formulating the research problem, it is required to prepare a research design that is a abstract structure within which the research would be conducted. The preparation of such design facilitates research to be as resourceful as possible yielding maximal information. In other words, the function of research design is to provide for gathering of pertitent facts and data with nominal expenditure of effort, time and money. In other words, according to the theories till date, a research design must specify the data collection part, research instrument and sampling plan.

Data Collection
The undertaking of data collection takes part in, after the research problem is specified and the design has been precise. While deciding the methods to be adopted to collect the data ,two sources always comes into mind. They are primary sources of data collection and secondary sources of data collection.This dissertation report completely based upon secondary data.

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Secondary Sources
Secondary sources of data collection or secondary data refer to those data which are already been collected for some other uses. They are the data which are readily available to the researcher. A researcher while using the secondary data for the research purpose has to select it carefully because everything available in the data would not be relevant for the research purpose. So various secondary sources are: articles, magazines, journals, internet, various governmental publications, various foreign governmental publications, reports and publications of various governmental and non-governmental associations, scholars, economists etc. In our study the secondary data is collected with the help of :1. Corporate profile of Rourkela Steel Plant. 2. Textbooks and references of Marketing. 3. Different websites.

Limitation Of The Study

Present study was limited to the Marketing Strategies of RSP only. Research and survey is quite limited and could not be explored to various other process of RSP. Data are collected only through secondary sources,and this curtails the scope of extracting deeper and practical knowelege.

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(company profile)

INTRODUCTION ROURKELA STEEL PLANT (RSP)

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Fig.2.1 Rourkela steel Plant (RSP), the first integrated steel plant in the Public Sector in India, was set up with German collaboration with an installed capacity of 1 million tones. Subsequently, the capacity was enhanced to 1.9 million tones. The plant was modernized in the mid 1990s with a number of new units with state-of -theart facilities. Most of the old units have also been revamped for effecting substantial improvement in the quality of products, reducing the cost and ensuring cleaner environment. The present capacity of the Plant is 2 million tones of Hot Metal, 1.9 million tons of Crude Steel and 1.671 million tones of Saleable Steel. Its wide and sophisticated product range includes various flat, tubular and coated products.

VISION OF ROURKELA STEEL PLANT

To be a respected world-class corporation and the leader in Indian Steel business in quality, productivity, profitability and customer satisfaction.

MOTTO OF ROURKELA STEEL PLANT

RSP has several mottoes. But major mottoes are: -

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Customers satisfaction Quality control Less Scrap Better facility & Adaptability

MAJOR UNITS OF RSP 1. ORE BEDDING AND BLENDING PLANT

The Ore Bedding and Blending Plant have a base mix preparation system with on-ground bedding, blending and conveying facilities. Set up under the modernization programme to provide pre-mix feedstock to Sinter Plant I & Sinter Plant II, the plant has a dispatch capacity of 5,00,000T of material per annum.

2. COKE OVENS The 4.5 MT coke ovens produce metallurgical coke to feed the blast furnace. The coke oven are equipped with wagon tipplers, automatichandling facilities, coal-blending provision, coke to feed the crushing and coke screening arrangements. Fig .2.2 3. 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. The 5th unit has been launched recently. 4. 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 16

facilitates production of special steels for application in electrical machines, pipe making, tinplate, boilers and auto chassis.SMS-1 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 program. The shop is provided with automation through three levels of computerized control, LD gas cleaning and recovery, power distribution system, water and utility services. 5. PLATE MILL This is 3.1 MT wide, 4 high reversing mills 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 program for slab heating. The mill has a production capacity of 2, 99,000 Tonnes per annum. 6. 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. 7. COLD ROLLING MILL This features a modern 5-stand tandem mill and a 4-high 1700-mm reversing mill. The

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tandem mill is equipped with automatic gauge control, x-ray gauge, data logging and thyristorisation. It produces about 6, 78,000 tonne per annum of cold rolled sheet. 8. 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.

9. 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. 10. 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 facilities ensure product quality. 11. 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.

12. 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

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yards in railway wagons. The department maintains 350 wagons, 40 locomotives and a network of 240 kilometers rail tracks all over the plant.

13. 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 the Information Technology and Production Planning and Control Department with the support of the Works and Projects units.

SECONDARY PRODUCTS OF RSP

Secondary steel products are generated during the process of primary production. It is generated at various pieces in the plants. More the production, more the secondary products would be produced. The defective products are stored in the secondary steel stock yard and from there they are supplied to the different venders of RSP. The secondary products generated in the process of steel making which are Re-Rollable scrap Steel Melting scrap Industrial scrap Defectives Re Rollable scrap: a) b) c) d) e) f) g) h) Steel plates cutting scraps. Steel plates shearing scrap. Steel crop ends scrap. Concast steel short length slab. Concast steel slab crop end. CI skull scrap. URIN/IS. Steel skull scrap Gr-I. 19

i) j) k) l)

Side trimming. BF fines. BF drums iron. Steel skull scraps. Steel Melting Scrap: Steel skull scrap. Scrap bales (Bundle scarp from rail lines press). MS turning and boring. Side trimmimg. 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:
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SEMIS: MS ingots (Non Silicon) Pig iron. BF slag: BF granulated slag (NTL) Hard coke. Mixed breeze coke. Mixed coke. Nut coke. Coke Fraction:

The secondary products which are produced from different mills are as follows: Hot strip mill Plate mill Def. Plates Short plates Mixed plates Def. chequered Plates Def. Plates/HR Plates Def. HR Coils Semi Rolled Plates Semi Rolled in coil form

Silicon steel mill Def. CRNO Sheet

Cold rolling mill Def. CR Coils Def. GP Sheets Def. CR Sheets

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Def. Galvanized Corrugated Sheet Rejected Tin Plates Scrap Def. Tin Plates HR Small Coil CR Coil Ends CR Cut Flat End Black Plate Coil End CR Sheet Cutting

Pipe plant There are two type of pipe SW and ERW pipe o SW pipe (spiral welded pipe) Pipe and Cutting Pig Iron

o ERW pipe End Cutting Of Pipes

COAL CHEMICALS HP Naphthalene Anthracene Oil LCO GR-II Carsolic Oil Crud Coltar Extra Hard Pitch(EHP) Carbolic Oil

PRODUCTS WITH PROPERTIES & ITS APPLICATIONS

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PRODUCTS LPG Cylinders, automobile, railway wagon chassis and many types of highstrength applications

APPLICATIONS

HR Coil Fig.4.1

Plates

Pressure vessels, ship building and engineering structures

Chequered Plates

Flooring and staircases in industrial sectors and railway platforms

CR Sheets and Coils

Steel furniture, white goods, railway coach paneling, drums, barrels, deep drawings and extra deep drawings

Galvanised Sheets

Roofing, Paneling, industrial sheeting, air condition ducting and structural

Electrolytic Tin Plates

Container for packaging of various products including edible oils and confectionary items

Silicon Steel Sheets and Coils

Small generators, starters for high efficiency rotating equipment and relays etc.

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MARKETING DEPARTMENT OF RSP

The marketing department of RSP was earlier called as the Order Department. It only deals with the secondary products of RSP. The Managing Director Mr. S.N Singh heads the marketing department of RSP, General Manager Mr. D.P Roy and other executives are also in charge of the department. 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 reduced to less number of employees. 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. There are two major departments under RSP as the Secondary Steel Stockyard and central disposal yard. Earlier till 1974 the Central Marketing Department (CMO) was looking after the marketing of the scrap products. Marketing of the defective products was also handled by the CMO till 1998, and though they are also responsible for the marketing of primary products RSP had produced primary products blindly and due to that there was a huge increase in scrap and defective products. For that huge loss incurred in end nineties. But later the individual plants were asked to handle the sale of secondary and the scrap products generated in their respective units. The present annual revenue generated through sale of secondary items is to the tune of Rs.320 350 crores.

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ORGANIZATIONAL STRUCTURE OF RSP (MKTG)

Mr. S.N Singh Managing Director (RSP) Mr. S.N Singh Managing Director (RSP)

Mr. S.S. Mohanty (MM) Mr. D.P. Roy GM (Marketing)

ED

Mr. A. Gupta DGM (Marketing) Mrs. M. Kumar AGM (Marketing) Mr. R. Panda Jr. Manager (Marketing) Mr. S. Behera Sr. Manager (Marketing)

Mr. S. Chatterjee DGM (Marketing)

Mr. I.M. Panda Manager (Marketing)

Mr. J. Nayak Jr. Manager (Marketing) Fig.4.2

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MARKETING SECTION OF RSP

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

1.

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. (a) Central Disposal Yard. (b) Idle Assets.

(a) 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 the order produced by the Executive Director (Works). These are collected in 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 RSPs own products.

MARKETING OF SCRAPS THROUGH CDY

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As mentioned above, Used and rejected items like Used Scrap Rolls, Cable, Empty Containers, Batteries, Tyres, Zinc Dross, and Small Assets etc. are being sold from Central disposal yard (CDY). The maintenance scraps are stored in the CDY. The disposal yard indicates the areas where the materials of different shapes & sizes are declared as scraps or unserviceable or obsoletes are stored. Efficient storing & disposing of such material brings good result in terms of money & systematic movement of these material avoiding pile up and mix up. The materials are collected from different units of plant as per E.D procedure order. These are collected on daily basis. The scope of this procedure order is restricted to all arising of RSP except for those which are sold by marketing department to auxiliary industries & unused arising of RSPS over product. These materials are collected & complete lots are formed. These lots are offered to disposal. The pricing committee of RSP fixes the prices for lots. The Marketing Dept. Of RSP is doing scrap management. The marketing department disposes through two modes, Melting and Marketing. Melting deals with recycling of the scraps and idle assets for using it as a raw material for the production. Marketing deals with the selling of the scraps and idle assets through auctioning.

(b) IDLE 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- incharge 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 (MECON).

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2.

SECONDARY STEEL STOCKYARD (SSSY)

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 cores 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: The concerned sale order should be valid with respect to expiry date, suspension of sale order, cancellation etc. The party should have submitted the revised price acceptance. The sale order should be sufficient (i.e. minimum 10 tonne) for allotment of one wagon. A unique SSSY no. is assigned (5 digits) to the materials on entry to the stockyard. The materials coming through truck (10 tonne) are allotted lot nos. that is of 4 digits. The materials coming through wagons are more in quantity and are allotted plot nos. that are of three digits. For entry of trucks into the stockyard identification of the driver, helper & R.C no. of the vehicle is required. A private contractor is appointed for loading and unloading the material at SSSY.

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 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 . Materials going out of SSSY, an invoice will be made-then dispatch advice will be given on which one can take out the material. On the last day lifting the material DCR (delivery completion report) is issued for each lot, which come to the finance department. This DCR is required for refunding EMD money to the customer. SINGLE WINDOW SYSTEM CONCEPT IN SSSY 95% of the secondary products coming to the SSSY are through rail and only rest come through road. The lots are provided on the basis of Internal Dispatch Advices carried by the products from the respective plants. Then prepares the SSSY memo which consists following details, Internal Dispatch Advice No. Plot no. /Lot no. Location of the plot / lot Then, SSSY forward it to the marketing department of RSP which gives the information of material being successfully stored in the secondary steel stockyard. Then marketing department takes initiative for the auction in the present system, there is a single auction. Now SSIs are given preference but not at the cost of price. The party taking part in the auction is required to deposit Rs.1 lakh in the form of Earnest Money Deposit. EMD initially deposited will be adjusted towards the final payment. In case of failure of the purchaser to deposit the Security Deposit and first installment of payment as specified in acceptance letter, the EMD/SD shall stand forfeited. The bidders who back out will be additionally debarred from participation in future forward auctions for a period of three months. The payment of the first installment and the Security deposit should be made 15 days from the date of issue of acceptance letter. After this there is a provision of penalty. There is 7 days time for payment and ten days time for lifting. The H1 parties are required to pay 102% of the amount. There is an extra 2% of the payment, this is because of

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adjustment of amount if there any extra quantity of material released to them else this 2% is refunded to them. The parties who are issued the sales order to lift their allotted materials from the secondary steel stockyard. They are required to come there with the Sale Order issued by the RSP along with the demand draft and an authorization letter from the company. These documents are to be signed by the finance Department and challan is made. The challan is to be deposited in the cash counter from where a money receipt is issued. The party has to submit the money receipt to the finance department, for which they get the release order of their material. After entering of the truck into the SSSY a weighment is required for the empty truck for which it has to come in the weighbridge. The loaded truck is again measured in the weighment bridge. After weighment the truck exits from SSSY. Delivery Completion Report (DCR) is prepared by the stockyard during the process of lifting and dispatching of the material to their respective parties. DCR is forwarded to the marketing department and finance department as an intimation of the delivery being completed. Through this we have come to an end of the auction, allotment and lifting of the materials under the Single Window System.

3.

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.

4.

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.

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LD slag is another waste obtained from SMS. It is the steel slag and its primary customer is 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.

COMPANYS OVERVIEW
Steel Authority of India Limited (SAIL) is Indias largest integrated steel manufacturer with a capacity of 12mn tons with turnover of Rs.31800crores. The company is ranked amongst the top ten public sector companies in India in terms of turnover. It produces both basic and special steels catering to domestic construction, engineering, power, railway, automotive and defense industries and for sale in export markets. SAIL produces iron and steel at its four integrated steel plants and three special steel plants, located in the eastern and central regions of India. The location gives them access to domestic sources of raw materials including the companys iron ore, limestone and dolomite mines. The Government of India owns 86% and retains voting control of the company. 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, it has its own in-house center for engineering and technology (CET), management training institute (MTI) and safety organization at Ranchi.

PRODUCT-MIX : : Bloom, Billets and Slabs Structurals, Crane rails, Bars rods and Rebars, Wire rods

Semis Longs

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Flats Rails

: :

HR coils and plates, CR coil and sheets, GP/GC, Tinplate, Electrical steel Pipes Rails, Wheels, Axles

Tubular :

The companys wide range of long and flat steel products is much in demand in the domestic as well as the international market. The marketing activity is carried out by the Companys 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. STEEL DEMAND IN INDIA The Steel Industry in India is poised for faster growth in the decade ahead as the Industrial and economic development of the country gains pace. What however cannot be ignored is that increasing emphasis on globalization and liberalization will closely link the fortunes of the Indian steel industry to the global market. The domestic outlook for finished steel has been estimated as follows: Domestic Market Growth Outlook Growth Trajectory GDP @ 6.5% 2006-2007 (million tonnes) 39.5 - 40.7 2011-12 (million tonnes) 57.8 - 59.9

The total steel consumption of finished steel in India has been estimated to touch 60 million tonnes from the current level of over 40 million tonnes. It is important to note that despite the near doubling of the consumption level in the country, per capita domestic Consumption would continue to be substantially below the world average, which is about 145 kg. Amongst the steel consuming segments, transportation of petroleum products, household appliances, and automobiles are expected to have the fast growth. However, even a modest growth of 4.4% growth in the construction sector will translate into a large increase in actual consumption volumes. Thus, construction will contribute towards a high proportion of incremental demand in future.

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MAJOR PLAYERS IN STEEL SECTOR 1. Steel Authority of India Ltd.

2. Tata Iron and Steel Company 3. Jindal Steel and Power Ltd. 4. Jindal Iron and Steel Ltd. 5. Jindal Vijayanagar Steel Ltd. 6. Ispat Industries Ltd. 7. Jindal Stainless Ltd. 8. Kalyani Steel Ltd. 9. Rashtriya Ispat Nigam Ltd. 10. Lloyds steel Ltd. 11. Nippon dendro Ispat Ltd 12. Essar Steel Ltd.

QUALITY DOES NOT STOP AT SAIL The quality of steel is just one area being constantly developed by SAIL. The quality of the life is other. Reaching out to the needy, bringing water to thirsty, knowledge to the un-schooled, medicine to ailing. Providing training and agricultural input to farmers, building roads, and bridges to a better brighter future because concern for people lies nearby. ENSURING COMPETITIVENESS Achieving cost competitiveness remains a prime target of SAILs future plans. Today in SAIL, the focus of the sustained cost control exercise is on shortening cycle time, reducing specific usage of inputs, eliminating wastages and improving yields. The work has begun in right earnest. The challenge before SAIL is to ensure that the projects are implemented without 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.

CORPORATE SOCIAL RESPONSIBILITY(CSR)

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Apart from providing primary medical, health and educational facilities to the people living in and around its townships, SAIL has been undertaking several initiatives to promote art and culture of the country ,with four spots academies under its fold, SAIL continues to promote spots as an integral part of the companys corporate philosophy.

PRESENT STATUS AND FUTURE PLANS OF SAIL SAIL today is one the largest industry entities in India. Its strength has been the diversified range of quality steel products catering to the domestic as well as the export market and a large pool of technical and professional expertise. The total turnover of the company is around Rs.72,178 crore during 2007-08. The strategy includes a divestment of non-core activities restructuring of marketing functions and a focus on pruning cost of operation. The goal for the company is to emerge as one of the lowest cost producer in the global steel market. Quality steel products from SAIL have carved a niche for themselves in the global steel market. The company aims at making its global presence felt through export, joint ventures and strategic alliances with internationally reputed steel makers in a fast turnaround, which include financial restructuring and business restricting to focus on core business of making carbon steel and withdrawing from non-core and non viable activities, making focus on market requirement, ensuring greater involvement of plants on marketing initiative, achieving cost leadership through rigorous cost cutting drive and rationalizing manpower to bring down the total no. of employee to competitive levels are some other facets of the strategy. SAILs ability to continuously grow in different market conditions reflected the inherent strength of the company to manage its operations under varying and fast changing business environment over a long span of time. ONGOING PROJECT Total expenditure to be expected to be more than Rs.54,000 crore(US. 12.6 billion). Financing in manner that SAIL remains with in debt equity ratio 1:1. Total Capex (capital expenditure) for 2007-08 was 2181 crore and the estimated

capex for 2008-09is Rs. 5000 crore. Capex during Q1 FY09 was 737 crore.

34

Expenditure thereafter shall grow multifold and shall continue till FY2012.

EXPECTED OUTCOME Enhancement of Production Capacity and Market Share. World Class Technology and Products. Improved Product mix/ proportion of value added products. Complete elimination of Semi-finished steel. Enhanced Pollution control measures, with environmental conservation. Captive Power generation capacity to increase from 872 MW to 1922 MW. Objective of Growth Plan 100% production of steel through Basic Oxygen Furnace (BOF) route. 100% processing of steel through continuous casting. Value addition by reduction of semi finished steel. Auxiliary fuel injection system in all the Blast Furnaces. State-of-art process control computerization/ automation. State-of-art online testing and quality control. Energy saving schemes. Secondary refining. Adherence to environment norms. SAILs Growth Plan 2010 Much has happened ever since SAILs Corporate Plan was announced in 2004. Investment plans for the three speciality steel plants have been firmed up. Company has grown in size 35

with the amalgamation of IISCO (now renamed as IISCO Steel Plant). Production targets have been revised from 19 million tonnes (MT) of steel to about 24 MT. Estimated investment has increased from Rs 25,000 crore to around Rs 40,000 crore. And the time period has been squeezed by two years, bringing the targeted year of completion of major projects from 2010 to 2012. Saleable Steel Capacities (in million tonnes) PLANT Bhilai Steel Plant Durgapur Steel Plant Rourkela Steel Plant Bokaro Steel Plant IISCO Steel Plant Alloy Steels plant Salem Steel Plant Visvesvaraya Iron & Steel Plant 0.22 6.21 2.85 2.90 6.50 2.37 0.43 0.36 2010

CENTRAL MARKETING ORGANIZATION (CMO) 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. Production planning and dispatch co-ordination with plants. Export of steel. Import of coal and other consumables. Market research

36

37

ONLINE MARKETING SYSTEM

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.

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 clue train 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 can 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

38

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.

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 vendors 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,

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 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 secondary items are fails to make raise any demand then those material are sale through open auctions.

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TERMS AND CONDITIONS OF ORDER BOOKING SYSTEM

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. Open Sale It refers to all the parties throughout India, so that all the vendors who are interested in auction can participate. The tender notice issued through leading newspapers, chambers of commerce, etc. Those customers who bids in auction sale, they have to deposit Rs 50,000 as security before 7 days of the auction sale. 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 provided 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 without metaljunction.com and the system of metaljunction.com (new system). Not only for selling the product but also for buying different items, raw materials the auction takes place. There are five different system/junction for perform five different auction system. They are:-

40

Metal junction This system promotes the sale of secondary products. It is a forward auction. Here price keeps on increasing. Buy junction This system involves for the procurements of materials for SAIL. It is a reverse auction. Here price keeps on decreasing. Coal junction This system promotes the sale of coal (refinery form of coke). It is also a forward auction. Auto junction - This system is meant for selling of reprocess vehicles. It also comes under forward auction. EPS (Electronic piquipment system) - This system is a part of the buy junction. This is meant for small items whose value is less than 1crore. But in Rourkela Steel Plant there is only one junction which responsible for the marketing of the secondary products and other materials is known as metal junction

METALJUNCTION SERVICES LIMITED

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 etransactions 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. 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 metal junction. In September 2005, metal junction 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:

41

Steel Ferro alloys, minerals and metallic Non-ferrous metals 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 leadisng banks. Has arranged finance of Rs 28.7 billion till September 30, 2005

ROLE OF MARKETING DEPARTMENT BEFORE AUCTION

Before auction marketing department conduct a meeting where members are decide a price known as Reserve price or Secret price for the materials which will going to be auctioned. The price is named so because the price is reserved or kept secret till the end of the auction process. METAL JUNCTION 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.

PROCESS OF AUCTION
Metaljunction conduct auction through three stages/process: Pre-auction process 2. During-auction process 3. Post-auction process 1. Pre-auction process- In this process some steps are taken before place like: auction takes

1.

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i)

Preparing Catalog- Showing/giving least of the secondary product which is included for auction.

ii) Preparing Pricing least- Showing/giving least of the cost of the respected product.

SYNOPSIS OF CATALOGUE

FA Number FA Date Item Description Item Specification Quantity & No. of Lots EMD Amount & last date Of submission Bidding Basis .Excise Duty Sales Tax

FA/08-09/008 15.04.2008(Tuesday) Iron & Steel items from SSSY As per lot list 2754.952 MT in 73 Lots Rs 1,00,000/- to be submitted by 14.04.2008 Rs/MT(Only basic price is to be quoted) @ 14.42% extra. CST @ 3% against C From/OST@ 4% extra Entry Tax @ 1% extra for inside State Of Orissa 5% of the lot value

Security Deposit Payment in Installment(s) One installment Payment 10 days from the day following the date of Issue of Sale Order Date/Schedule Delivery Time 20 days from the day following the date of issue of Sale order. Penalty For In case of delayed payment ,further 7 days time with 1% penalty Late Payment and there-after penalty will be 3% for 7days more with prior permission from SAIL,RSP. Penalty for late Payment 1% per week or part there of Special All participants should furnish their PAN/TIN No.s compulsorily Remarks for taking part in the auction. Table.2.1

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2.

During-auction process - In this process auction takes place. Bidders are bidding for different secondary items.

Role Of Bidder
The bidder would participate in the auction with the aim of bidding to secure the auctioned item in the auction. The bidder would be provided access to the auction through a User ID protected by a password. The bidder needs to ensure that the User ID and Password is not revealed to unauthorized persons. Bidders are also requested to change the password allocated to them by the service provider to keep their confidentiality. However it would be bidders sole responsibility to ensure the security and privacy of the same and he/they would not hold the client/service provider responsible in any manner whatsoever for any misuse of these user IDs and /or password .access to the general rules and regulation and the letter of interest .Payment of Earnest Money Deposit (EMD)as decided by the client before the start of forward auction will be one of the necessary conditions for participating in the auction. BIDDERS hereby confirm that they shall commit to lift the item (being bid for) at the price entered by them in the auction engine AND at the terms and conditions specified herein by the Client. All Prices entered shall be legally binding on the bidders. Bidders are strongly advised to exercise due diligence while placing bids. Failure to honor the bids placed during online bidding shall render the bidders liable for penal action as deemed fit by Client/ Service Provider. In the event of winning an allotment in the auction mechanism, the bidder shall commit to fulfill outlined obligations under the contract. The bidders shall bid on the terms specified by the client & place their bid in the auction engine in the manner specified by Service Provider. The bidders shall not 44

stipulate any conditions on their own unless the terms of the client ( the clients terms & conditions) expressly permit such conditions being stipulated by the bidder. Bids entered with conditions attached shall be considered Conditional bids & service provider retains the right of rejecting these bids even without intimating the client. CONDUCT OF THE AUCTION Only those bidders who have been approved by the client and handed over stamped and manually signed General Rules and Regulations governing conduct of on line auction along with Letter of Interest, required EMD amount and other necessary documents to the Client/ Service Provider prior to the start of online auction will be given Login ID and PASSWORD to enable them view and participate in online auction. The Auction shall be conducted on pre-specified date. The Key Terms

pertaining to the conduct of Auction such as START TIME, DURATION, END TIME AND AUTO EXTENSION FACILITY shall be specified separately for each Auction. Service Provider retains the right to cancel or reschedule the auction, with approval of the competent authority of the client The duration of auction may also vary from the pre-specified period of time either on account of termination of the auction by service provider on the advice of the client Or In case of situation where it is felt that continuance of the auction proceeding is prejudicial to the smooth conduct and/or the i.e. terms integrity of the auction process. Or Due to Auto Extension during the auction, duration may increase from specified period.

45

END TIME

It is the fixed time duration of 30minutes for a normal online auction, but there are other factors which can affect the end time like inactivity time and auto extension time. AUTO EXTENSION FACILITY It shall be specified separately for each Auction. Generally 3 minutes auto extension facility is given at the last minute to remove any sort of biasness in the auction. This continues until no bids are paced in the specified period i.e., last 3 minutes. The customer bidding the highest i.e. H1 price is issued the sales order. However, while issuing the sales order price matching privilege is done for SSIs and they are given priority. 3. Post Auction Process After the online auction is over the H-1 or the Highest Bidder is identified and material is sold to that bidder But while finding out the highest bidder, there are various other factors that are considered. If the amount that the highest bidder has quoted is more than the amount at which the product was sold last year then the product is sold to the bidder. But if the amount quoted by the highest bidder is less than the amount at which the product was sold last year then the product is not sold to the bidder, and the bidding process is again done.

Terms and Conditions for Sale of Materials through Online Auction from Rourkela Steel Plant
1. MANEGMENT The management will mean the Managing Director, Steel Authority of India limited, Rourkela steel plant or any officer authorized by him to act on his behalf. 2. PURCHASER The purchaser will mean the successful tenderer whose tender has been accepted under the terms of the tender. 3. TERMS AND CONDITION 46

a) Tenders are accepted on the assumption that the tenders have inspected the materials and have known that they are tendering for whether they have first inspected the materials or not and that the principle of Caveat Emptor shall apply. The sale is on the basis of AS IS WHERE IS & NO COMPLANT BASIS. The material will be lifted from the site of storage with all faults and errors in description or otherwise if any. Quantity, Quality, Size measurement, marks and number stated in the tender documents are approximate and no warranty or guarantee shall be implied. The tenders are advised to inspect the materials before offering their prices. b) Inspection Of Stores: Interested parties will be permitted to see the materials from 9AM to 5PM daily on working days. Necessary entry passes may be obtained from the Receptionist/CISF. 4. TENDER FORMS a) Tenders will be submitted in the prescribed forms which will be made available as appendix to the invitation to tender. The tenders will sing on each page of the tender documents, terms and conditions of sales, schedule etc. in token of acceptance thereof. However, the signature on the tender schedule along shall be deemed to be acceptance of all terms and conditions of sale & schedule and other documents forming parts of the tender. b) Earnest Money: Each tender will be accompanied by an Earnest Money Deposit in the form of Demand Drafts or Bankers Cheques in the name of Steel Authority of India Limited, Rourkela steel Plant, Rourkela payable at State Bank of India at their Rourkela Branch or at any of the Nationalized/Schedule Bank at their Rourkela Branch. The amount of Earnest Money will be stipulated in the invitation to tender. Cheque will not be accepted towards earnest money deposit, it is not possible to adjust earnest money from any sum of money due from the Plant , on account of pending bill security deposit or earnest money paid towards another tender. Tender without earnest money will be rejected. 5. SUBMISSION OF TENDER Tenders will be submitted by the date and time stipulated in the invitation to tender to the appropriate authority in two parts. In one part ,the tenderer shall enclose the Demand

47

draft /B.C towards the Earnest Money in a sealed cover duly superscribed with the tender no. and date . In the other part the tender documents should be enclosed in a separate cover super scribing with tender no.& date . Both the covers should be sealed in the bigger envelope. 6. VALIDITY OF OFFERS The quotation shall remain valid for 30 days from the date of opening of tender. 7. CONDITIONAL Tenders will not be considered. 8. LATE Tenders will not be accepted /considered. 9. PAYMENT On receipt of the sale order ,the purchaser will deposit the amount as per details indicated in sale order by demand draft Payment system (taking the following as an example) Sale value(Rs in lakhs ) UP TO Rs. 20 LAKHS SAY 30 LAKHS Open category -102% for each lot to be deposited -EMD of Rs 1 lakh will be adjusted -Rs 50,000/- as 5% advance value (+1 lakh EMD) -thereafter 102% of value for each lot -Rs 1,50,000/- advance will be adjusted SAY 40 LAKHS in the last lot -Rs 1,00,000/- as 5% advance value (+ 1 lakh EMD) -thereafter 102% of value for each lot -Rs 2,00,000/- advance will be adjusted in the last of lot Table.3.1 SSI UNITS -5% of lot value as advance -thereafter102% of value for each lot -5% advance will be adjusted in the last lot -Rs 1,50,000/- as advance -102% of lot value for each lot -Rs 1,50,000/- advance will be adjusted in the last lot. -Rs 2,00,000/- as 5% advance -thereafter 102% of lot value for each lot -Rs 2, 00,000/- of advance will be adjusted in the last lot.

48

 EXTENTON OF DATE OF PAYMENT Failure to deposit the value of the material within the period stipulated in the sale order, successful tenderer is liable to pay penalty as hereunder. After receive the sale order, which contains the detail information about the materials, vender name, and dispatch date, payment conditions. The venders get some stipulated period for lifting the materials as followed. 10 Days for lifting Next 7 days with Another 7 days with next working day. - No penalty - 1% penalty - 3% penalty

In case the last day is holiday as per company calendar then the last date may extended to

10. TAXES AND DUTIES All taxes/excise duty under the local, state ,central or any other law shall be payable by the purchaser in addition to the sale value as applicable for each item at the prevailing rates as on the date of delivery. 11. RELEASE ORDER & DELIVERY On receipt of full payment from the purchaser the management will issue a release order, which will enable the purchaser to take delivery of the materials from the stockholder. The bidder who has signed the tender is required to sing the release order. If this is not possible and if the tenderer desires to take delivery through his authorized representative duly attested by the tenderer. The management may ,in its entire discretion decline to act on act on any such authority shall and it shall be in will be at the purchasers sole responsibility & risk and no claim shall lie against the management on account , whatsoever if delivery is affected to wrong person . a) Weighment of the material would be done inside the plant weighbridge. The weighment taken in above weighbridge will be final and binding for all purposes. The road delivery procedure being followed in the plant would be strictly applicable and tenderer would lift the material as directed by the head of the concerned department or his authorized representative.

49

b) Delivery time for removal of goods: The delivery of the materials will be effected in situ by the management. Time is the essence of the contract. The goods sold will be removed by the buyer from the site within the date specified in the delivery order/sale order. Delivery of the materials will be made during working hours on all working days on presentation of the delivery order/release order by the purchaser to the officer in charge. Custodian department who may suspend the delivery for a particular period of time for want of any clarification or other technical/operational reasons. The buyer will make their own arrangement for collection /removal and transportation of the items/lots purchased and will not be entitled to claim any facilities or assistance for the transport/removal of the goods/lots from the plant premise. The management may subject the availability; extend at its discretion certain facilities such as cranes etc. on chargeable basis for handling the lot. The fact that such application has been made to the management or any delays on the part of the management to grant such facilities dose not entitle the purchaser for any extension of the delivery date. 12. RAILWAY SIDING FACILITIES The purchasers will have to pay the management in advance the siding charges as applicable from the time to time. Necessary security deposit payment will be made by the purchaser on this account, the purchaser will be liable for the payment whenever the plant, siding is used under their own arrangement or through the plant. 13. SHORTAGE OF GOODS If goods are sold in lots and not in number or units, any reference to the quantity, quality, size, measurement, number and weight in the notice or other documents, then the purchaser shall no claim against the management for refund of whole or any part of the purchasers money or for loss, of profit, of interest, damage or other-wise. 14. RE-SALE Re-sale will not be recognized by the management. Sale orders and release orders will be made out only in the name of actual purchaser CONDITIONS UNDER REFUND OF MONEY 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

50

material but failed to make payment for them some penalties are there. 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. PRICING STRATERGY OF RSP FOR ITS SECONDARY AND SCRAP PRODUCT 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. While fixing the price of such scraps, a number of factors are taken into account by the pricing committee. a) Marketed feedback from 5 RSPs zonal officers located in New Delhi, Mumbai, Chennai, Kolkata 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 hand feed back from the local market. All the above activity are taking place by the help of feed back which are collected through market analysis. RESERVE PRICE

51

This is the price decided by the pricing committee of RSP and is based on the prices of the prime products and the prices of the similar products in the other sister plants. The reserve price does not affect the sales as the customer is not aware of it. Strategies inside the company may change after viewing the H1 prices offered by the customers through meetings and discussions. The reserve price committee of RSP will keep RP in secret in the organization. RP is fixed by studying the market condition and by analyzing the market feedback given by the metal junction floor. RESERVE PRICE COMMITTEE determines reserve price on the basis of several thumb rules. They are, Price of the last sales, i.e. recent past is taken into consideration. Price fluctuation in the market, i.e. market trend is considered Minimum price limit of 24000 must be satisfied otherwise the goods will be given for recycling START BID PRICE This is the start price from where the auction starts. It has been decided by the RSP on the notions of pre experiences, current market scenario and the cost factor involved for the product.

52

(FINDINGS & RECOMMENDATION)

FINDINGS
53

Current Status of the Company

RSP had sold about nine lakh tonnes of saleable steel (average 1.40 lakh tonnes per month) during first-half of the current financial year, against its annual target of about seventeen lakh tonnes and gained net profit of Rs 800 crore till September 2008. First time in its history the plant crossed the 2 million tonnes mark in the production of hot metal during the year 2006-07. The most significant feature of RSP is that all the major units of RSP records more than 100% capacity utilization on a consistent basis. Rourkela Steel Plant (RSP), the public sector steel PSU, achieved best ever production of hot metal and crude steel during the first eight months of the current fiscal. Rourkela Steel Plant (RSP), a unit of Steel Authority of India Limited (SAIL) has successfully implemented e-payment to its vendors by using the SBI online internet banking service.

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PERFORMANCE OF DIRECT PLAN SALES: 2003-04 TO 2008-09 FINA NCIA L YEA R

200304 200405 200506 200607 200708 244.5 6 198.9 3 179.3 1 311.7 3 328.4 0

IRO N& STE EL

SPE CIA L PLA TE

14.50 23.23 37.59 101.5 2 106.9 7

B.F. SLA G

COK FE E FRA CT RT

FE RT INT ER

COA L CHE M
39.11 39.17 40.03 74.59 79.73

WAS TE PRO DUC T

3.14 2.51 4.96 5.04 3.18

AUCTI ON & DISPO SAL

26.60 17.21 24.31 25.06 21.81

IDLE ASSE TS

TOT AL

18.71 19.24 23.32 24.00 15.90

22.00 20.17 12.18 7.23 2.54

4.84 6.57 6.38 7.64 9.12

_ _ _ _ _

6.66 2.85 3.64 9.99 0.70

379.12 330.42 334.70 567.60 568.35

200809

350.7 83.82 15.20 6

0.39

11.4 5

92.19

8.76

13.08

40.03

615.6 8

Table.3.2 In the last five years RSP has awarded contracts in an average amount of around Rs 500 million per year (around EUR10 million) to small local enterprises. Rourkela Steel Plant (RSP), the public sector steel PSU, achieved best ever production of hot metal and crude steel during the first eight months of the current fiscal. RSP had sold about nine lakh tonnes of saleable steel (average 1.40 lakh tonnes per month) during first-half of the current financial year, against its annual target of about seventeen lakh tonnes and gained net profit of Rs 800 crores till September 2008

SUGGESTIONS
55

Considering all the facts, I think that there is a requirement of making changes in the policy of RSP. Some of the suggestions are given below. The marketing strategy of RSP should crucially depend upon customers satisfaction, so it is necessary to improve. The practice just in time delivery should be thoroughly internationalized to give 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 goods for product wise / zone wise requirement. RSP should be developing their sales promotion or advertising activities for awareness their product to the costumer which helps them to attract the costumer towards RSP. It also the duty of RSP to look after the growth of the small scale industries situated in the peripheral area, who were mainly depends upon the secondary products of RSP for their production process. RSP should develop its production units, which will helps to reduce production of secondary products and produce more primary products. It should try to reduce inventories or stock and improve the planning and scheduling of marketing strategy, i.e. always keep adequate amount of inventories, which avoid the shortage of supply as well as minimizing the losses due to thrift of tear. Time period for banning a customer for defaulting should be reduced from 6 months to 2-3 months. RSP should take proper steps for perfect market segmentation. Efforts should be made to find out newer, more profitable market for the products. Proper shedding at stockyard to avoid deterioration of material quality due to rain and moisture.

56

(CONCLUSION)

57

CONCLUSION Rourkela Steel Plant has completed four decades of existence and during this period there has been complete shift, moving from a monopolistic state to a totally competitive market environment. Over the years many changes were initiated. It being the pioneer in production of wide varieties of iron & steel and also produces diversified varieties of secondary products during the production process. RSP caters to a varied and wide spectrum of consumers. There is hardly any industry, which does not utilize its products either directly or indirectly. Customers are the beginning and end all business pursuits. Total satisfaction of customers requirement in all aspects is therefore the key to success of any business organization. Hence RSP now aims at devoting it energies towards producing quality and creating value for customers. Every operation, however small or big is carried out for keeping the customers and his expectation in mind. RSP is taking a lot of steps in marketing of steel. New payers were entered into the steel market. Each player would want to gain in terms of market share. As a forward step, a lot of innovations of products have been made to occupy an important market share. RSP gives priorities to various customers problems, its pricing and distribution policy. RSP now gives emphasis on making market oriented and customer oriented strategies. The marketing division of RSP is doing a lot of credit worthiness job in handling various customer oriented problems. Marketing division has acquired a lot of talents and these talents are able to deal with various customers needs. These various needs are collected by the talents of marketing department and take proper steps to meet the requirement of costumers demand as well as face the current challenges of the market. Greater marketing orientation has percolated across the organization. The marketing set up itself has undergone change with re-organization along with product lines, bifurcation of sales & ware housing functions, use of dealer channel and improving its effectiveness. So, from the above discussions, RSP has a hope of bright and prosperous future from its marketing division.

58

(BIBLIOGRAPHY)

59

BIBLIOGRAPHY
BOOK REFERED: Book: Marketing management Author: Philip Kotler Publication: Millennium Edition Book: Research Methodology (C.R. Kothari) Author: C.R. Kothari Publication: Vishwa Prakashan New Delhi (3rd Edition) Orientation Training Manual(RSP)- Volume 1 Volume 2 Annual Report of R.S.P. 2008

URL: www.sail.co.in www.rourkela.nin.in www.metaljunction.com www.steel.nic.in www.sailtenders.co.in www.google.com

ANNEXURE
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GLOSSARY OF THE TERMS

RSP SAIL SSIs EMD OFA SSSY LDP DCR CDY RMD IISCO PPCS CPP ISO NMDC CMO MT BOF TEFR CPFR DEPB RINL RDCIS WTO -

Rourkela Steel Plant Steel Authority of India Limit Small Scale Industries Earnest Money Deposit Online Forward Auction Secondary Steel Stockyard Lynz Diwitz Process Delivery Completion Report Central Disposal Yard Raw Material Division Indian Iron and Steel Company Production Planning and Control System Captive Power Plants International Standard Organization National Mineral Development Corporation Central Marketing Organization Million Tones Basic Oxygen Furnace Techno-Economic Feasibility Report Composite Project Feasibility Report Duty Entitlement Pass Book Rashtriya Ispat Nigam Limited Research and Development Center for Iron and Steel World Trade Organiza

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