bijay laxmi project

7/31/2019 Bijay Laxmi Project

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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 LaxmiUniversity 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 Prof. J.K.Joshi

HOD, MBA Director AcademicsTAT, BBSR TAT, BBSR

Ms Nilima Das

Faculty ,MBA, TACT, BBSR

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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

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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 therequirement 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

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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 my sincere

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.

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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

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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

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LIST OF TABLES

Chapter No. Contents Page No.

1. Declaration

Acknowledgement

Executive SummaryIntroduction

Significance of the study

Objective of the study

Research design

Research methodology

Limitation of the study

2. Company Profile

Company overview

Introduction of RSP Major units of RSP

Secondary products of RSP

Profile of organisatio n

Organization structure of RSP

3. Theoretical Framework

o Marketing section of RSP

o Online marketing system

o Pricing strategy

o Current status of company

Presentation and Analysis of data

4. Findings,Recommmendation

5.. Conclusion

7. Bibliography

8. Annexture

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Table No. Title of the Table Page No.

Table No. 2.1 Synopsis of Auction Catalogue 38-39

Table No. 3.1 Example For Payment System of Auction 44-45

Table No. 3.2 Performance of Direct Plan Sales From 2003-09 49

LIST OF FIGURES

Figure No. Title of the Figure Page No.

Fig. No. 1.1 Headquarter of SAIL 9

Fig. No. 2.1 Rourkela Steel Plant 15

Fig. No. 2.2 Units of RSP (COKE OVEN) 16

Fig. No. 4.1 Products With Their Applications 24

Fig. No. 4.2 Organizational Structure of RSP (MKTG) 27

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(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 ofcertain 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 beunderstood 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

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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 -the-

art 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, automatic-

handling 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

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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 PLANTSA 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. COMPUTERISATIONRourkela 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) Steel plates cutting scraps.

b) Steel plates shearing scrap.

c) Steel crop ends scrap.d) Concast steel short length slab.

e) Concast steel slab crop end.

f) CI skull scrap.

g) URIN/IS.

h) Steel skull scrap Gr-I.

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i) Side trimming.

j) BF fines.

k) BF drums iron.

l) 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)

Coke Fraction:

Hard coke.

Mixed breeze coke.

Mixed coke.

Nut coke.

The secondary products which are produced from different mills

are as follows: -

Hot strip mill

Def. chequered Plates

Def. Plates/HR Plates

Def. HR Coils

Semi Rolled Plates

Semi Rolled in coil form

Plate mill

Def. Plates

Short plates

Mixed plates

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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Fig.4.1

PRODUCTS APPLICATIONS

HR Coil

LPG Cylinders,

automobile, railway

wagon chassis and

many types of high-

strength applications

Plates

Pressure vessels, ship

building and

engineering

structures

ChequeredPlates

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

GalvanisedSheets

Roofing, Paneling,

industrial sheeting,

air condition ducting

and structural

Electrolytic

Tin Plates

Container for

packaging of variousproducts including

edible oils and

confectionary items

Silicon SteelSheets and

Coils

Small generators,

starters for high

efficiency rotating

equipment and relaysetc.

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MARKETING DEPARTMENT OF RSPThe 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 SinghManaging Director (RSP)

Fig.4.2

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Mr. S.S. Mohanty ED

(MM)

Mr. D.P. Roy

GM (Marketing)

Mrs. M. Kumar

AGM (Marketing)

Mr. R. Panda

Jr. Manager

(Marketing)

Mr. A. GuptaDGM (Marketing)

Mr. J. Nayak

Jr. Manager (Marketing)

Mr. S. ChatterjeeDGM (Marketing)

Mr. S. Behera

Sr. Manager

(Marketing)

Mr. I.M. Panda

Manager (Marketing)

Mr. S.N Singh

Managing Director (RSP)


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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- in-

charge declared the assts are ideal. A committee is set for identifying the ideal assets

should identify it, this committee is known as the IDEAL ASSETS FIXACTIONCOMMITTEE. 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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. 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 comethrough 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 isgenerated 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

Semis : Bloom, Billets and Slabs

Longs : Structurals, Crane rails, Bars rods and Rebars, Wire rods

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Flats : HR coils and plates, CR coil and sheets, GP/GC, Tinplate, Electrical steel

Tubular : Pipes

Rails : Rails, Wheels, Axles

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

2006-2007

(million tonnes)

2011-12

(million tonnes)

GDP @ 6.5% 39.5 - 40.7 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. 7. Jindal Stainless Ltd.

2. Tata Iron and Steel Company 8. Kalyani Steel Ltd.

3. Jindal Steel and Power Ltd. 9. Rashtriya Ispat Nigam Ltd.

4. Jindal Iron and Steel Ltd. 10. Lloyds steel Ltd.

5. Jindal Vijayanagar Steel Ltd. 11. Nippon dendro Ispat Ltd

6. Ispat Industries 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 SAILPRESENT 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 thecompany 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.

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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

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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 2010

Bhilai Steel Plant 6.21

Durgapur Steel Plant 2.85

Rourkela Steel Plant 2.90

Bokaro Steel Plant 6.50

IISCO Steel Plant 2.37

Alloy Steels plant 0.43

Salem Steel Plant 0.36

Visvesvaraya Iron & Steel Plant 0.22

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

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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 ofthe 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

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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:-

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Metal junction This system promotes the sale of secondary products. It is a forward

auction. Here price keeps on increasing.

Buy junctionThis 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 ofTATA Steel and SAIL.

Founded in February 2001, it is today India's largest e-commerce company (with e-

transactions worth Rs 9,131 crore) and runs the world's largest e-marketplace for steel. The

steel supply chain in India has been transformed by the company, which has improved the

efficiency, transparency and convenience with the way in which steel, especially secondary

steel, is bought and sold.

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:

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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

Table.2.1

FA Number FA/08-09/008

FA Date 15.04.2008(Tuesday)

ItemDescription

Iron & Steel items from SSSY

ItemSpecification

As per lot list

Quantity &

No. of Lots

2754.952 MT in 73 Lots

EMD Amount

& last dateOf

submission

Rs 1,00,000/- to be submitted by 14.04.2008

Bidding Basis Rs/MT(Only basic price is to be quoted)

.Excise Duty @ 14.42% extra.

Sales Tax CST @ 3% against C From/OST@ 4% extra

Entry Tax @ 1% extra for inside State Of OrissaSecurity

Deposit

5% of the lot value

Payment in

Installment(s) One installment

Payment

Date/Schedule

10 days from the day following the date of Issue of Sale Order

Delivery Time 20 days from the day following the date of issue of

Sale order.

Penalty ForLate Payment

In case of delayed payment ,further 7 days time with 1% penaltyand 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

Remarks

All participants should furnish their PAN/TIN No.s compulsorily

for taking part in the auction.

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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

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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.

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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

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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

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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. CONDITIONALTenders will not be considered.

8. LATETenders will not be accepted /considered.

9. PAYMENTOn 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)

Table.3.1

Sale value(Rs in

lakhs )

Open category SSI UNITS

UP TO Rs. 20

LAKHS

-102% for each lot to be

deposited

-EMD of Rs 1 lakh will be adjusted

-5% of lot value as advance

-thereafter102% of value for each lot

-5% advance will be adjusted in the last lotSAY 30 LAKHS -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

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.

SAY 40 LAKHS -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

-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.

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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 - No penalty

Next 7 days with - 1% penalty

Another 7 days with - 3% penalty

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

next working day.

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.

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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

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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 verymuch 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

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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.

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(FINDINGS & RECOMMENDATION)

FINDINGS

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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 ofabout 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

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

FINA

NCIA

L

YEA

R

IRO

N &

STE

EL

SPE

CIA

L

PLA

TE

B.F.

SLA

G

COK

E

FRA

CT

FE

RT

FE

RT

INT

ER

COA

L

CHE

M

WAS

TE

PRO

DUC

T

AUCTI

ON

&

DISPO

SAL

IDLE

ASSE

TS

TOT

AL

2003-

04

244.5

6

14.50 18.71 22.00 4.84 _ 39.11 3.14 26.60 6.66 379.12

2004-

05

198.9

3

23.23 19.24 20.17 6.57 _ 39.17 2.51 17.21 2.85 330.42

2005-

06

179.3

1

37.59 23.32 12.18 6.38 _ 40.03 4.96 24.31 3.64 334.70

2006-

07

311.7

3

101.5

2

24.00 7.23 7.64 _ 74.59 5.04 25.06 9.99 567.60

2007-

08

328.4

0

106.9

7

15.90 2.54 9.12 _ 79.73 3.18 21.81 0.70 568.35

2008-

09

350.7

6

83.82 15.20 0.39 11.4

5

_ 92.19 8.76 13.08 40.03 615.6

8

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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 practicejust 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 costumertowards 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.

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(CONCLUSION)

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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 nowgives 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.

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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.goog le.com

ANNEXURE

60
http://www.sail.co.in/http://www.metaljunction.com/http://www.steel.nic.in/http://www.sailtenders.co.in/http://www.sail.co.in/http://www.metaljunction.com/http://www.steel.nic.in/http://www.sailtenders.co.in/


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GLOSSARY OF THE TERMS

RSP - Rourkela Steel Plant

SAIL - Steel Authority of India Limit

SSIs - Small Scale Industries

EMD - Earnest Money Deposit

OFA - Online Forward Auction

SSSY - Secondary Steel Stockyard

LDP - Lynz Diwitz Process

DCR - Delivery Completion Report

CDY - Central Disposal Yard

RMD - Raw Material Division

IISCO - Indian Iron and Steel Company

PPCS - Production Planning and Control System

CPP - Captive Power Plants

ISO - International Standard Organization

NMDC - National Mineral Development Corporation

CMO - Central Marketing Organization

MT - Million Tones

BOF - Basic Oxygen Furnace

TEFR - Techno-Economic Feasibility Report

CPFR - Composite Project Feasibility Report

DEPB - Duty Entitlement Pass Book

RINL Rashtriya Ispat Nigam Limited

RDCIS - Research and Development Center for Iron and SteelWTO - World Trade Organiza

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