project on steel industry for opm

SUNIL SONY

ROLL NO. 26

EPGDM – 4

GLOBSYN BUSINESS SCHOOL

PROJECT ON INTEGRATED STEEL PLANT

SUBJECT - OPM TERM – II JULY 2009

OPM PROJECT JULY 2009

TABLE OF CONTENTS

Page No.

1. Product 02

2. Process Steps 03

3. Location 05

4. Layout Planning

07

5. Capacity Planning 09

6. Production & Operation Planning

10

7. Quality Requirement 12

8. Quality Assurance and Quality Control Plan

13

Sunil Sony, EPGDM-4 1


1. PRODUCT

Integrated Steel Plant (Finished Product TMT Bars)

Sl. No.

ModuleProduction per Annum

1. 2 x 100 TPD DRI Unit 60000

2. 2 x 8 T SMS Unit 80000

3. 80 MT Rolling Mill Unit 80000

4. Captive Power Plant 5 MW

Overview of Indian Steel Industry

The Indian steel industry has a history of 125 years and was a regulated

industry till 1991 when it was de-licensed and private players were

encouraged to manufacture steel. The sector received high priority for

automatic approval for foreign direct investment. The demand for steel was

expected to race ahead after liberalization so additional manufacturing

capacities were added.

The Indian steel industry ranks 5th in the

world with an annual production of 53.1

million tonnes in 2008. India accounts for per

capita steel consumption of 38 kg/year, as

against that of 180 kg/year in China, 600

kg/year in Singapore and 400 kg/year in the

European Union and the US. The country’s per

capita steel consumption will have to rise

substantially to a level comparable with that of China to realize the country’s

expansion plans in manufacturing, transportation and power infrastructure.

Correspondingly, the steel output and demand in India is expected to surge

to 110 million tonnes per year by 2020 from 53.1 million tonnes in 2007.



Major Steel Players in Eastern India

Steel Authority of India Tata Steel Limited Essar Industries Limited Jindal Steel & Power Limited Bhusan Steel Limited

2. PROCESS STEPS

PROCESS FLOW CHART

Brief Description DRI: Sponge Iron is manufactured by using coal based technology

where iron ore is reduced to iron in a rotary kiln fired by non-coking

coal. Input charge comprising of iron ore, coal and dolomite are fed

into the kiln. The Sponge Iron is then discharged through the cooler

and discharge on to a heat resistant belt conveyor to be carried into

product processing zone.

Steel Melting Shop: Sponge Iron is charged into Steel Melting Shop

with scrap and pig iron to manufacture mild steel. The liquid steel is

cast into semi-finished products such as billets, blooms, slabs etc

Rolling Mill: Billets produced are first heated in a reheating furnace

until they are red hot (1200°C) and then passed through roughing



stand. A stand is a collection of steel rolls (or drums) on which pressure

can be applied to squeeze the hot steel passing through them, and

arranged so as to form the steel into the required shape. The roughing

stand is the first part of the rolling mill. Each pass gradually changes

the shape and dimension of the steel closer to that of the required

finished product and the last pass delivers finished size of the product.

3. LOCATION

Chosen location for the Integrated Steel Plant to produce Finished Steel will

be Purulia, West Bengal. Following are the Location Advantages:

Purulia in the state of West Bengal declared as Industrial estate it is located

adjacent to the State Highway. Purulia is now one of the most important

industrial destinations of the state of West Bengal.

Land: Purulia has good road connectivity for the purpose of man and

material movement. As the location has a barren (non agricultural)

area therefore acquisition of land will not pose any kind of difficulty



Civic Amenities: The plant site is situated near Asansol town. All

necessary civil amenities (e.g. educational institution, college, school,

hospital etc) are available.

Transport: The nearest railway station is Purulia and Asansol. The

nearest Airport is located at Kolkata which is 325 Kms away from the

site. This gives convenience in man & material movement

Manpower: Availability of Skilled labour will not pose any problem as

various engineering institutes are located in the nearby area.

Water: The requirement of the fresh water to meet process make up

and drinking needs will be made available through pipe lines from

nearest Kasai River.

Power: The total power requirement for the proposed unit can be

sourced from Captive Power Plant. Balance if any can be sourced easily

from nearby power supply station DVC & WBSEDCL.

State Advantage: In West Bengal, the steel industry enjoys a

logistical advantage, growing market and an investment friendly

industrial climate. An abundant raw material supply makes it a

preferred industrial destination. The state attracted an estimated

proposed investment of Rs. 1,27,302 crore in Q3 2007-08. The

principal investments will be allocated towards power (Rs. 20,450

crore), steel (Rs. 17,133 crore) as well as oil and petroleum (Rs. 4,850

crore), creating a significant opportunity for the consumption of steel.

State Incentive Scheme: Since the location of the plant falls under

the Group C category as categorized under The West Bengal State Support for

Industries Scheme, the unit will enjoy following incentives as categorized in

the West Bengal Incentive scheme 2008 which are summarized as follows:

Employment

Generation

Subsidy

Reimbursement of 60.00% of the contribution

made towards

ESI and EPF for 7 years

Industrial

Promotion

Assistance

Eligible for waiver of 75% value added tax (VAT)

paid by the unit in previous year. It will be

disbursed for 10 years or till 50% of Fixed Capital

Investment is reached, whichever is earlier.



4. LAYOUT PLANNING

Lay out Planning for the following Facilities: Administrative Block: An Administrative Building will be made for

day to maintain and control day to day work.

Housing Colony: A Housing Colony for administrative and factory

workers. This will benefit the company and its workers by providing

them with standard living environment and regular recreation facilities.

Guest House: A Guest House for the visitors.

Canteen: A Canteen to provide quality of food to workers.

Laboratory: A well maintained Laboratory for the workers.

Medical Room: A Medical room with the entire first aid stuff has to be

considered for the operating and maintenance personnel.

Raw Material Storage Yard: For the Raw Material receipt & storage

would have capacity to store 1 month requirement.

Water Storage Area: To keep fresh water to meet process make up

and drinking needs.

Approach Roads: For the movement of man and material within the

plant area.

Green Belt Area: In the process of steel-making, even with the latest

technologies available, it is not possible to completely eliminate

pollution in any of its diverse forms - air, water, noise or solid waste.

Therefore it is proposed to have a green belt all around the plant site

by planting suitable species of evergreen and broad leaves type.

Plantation is also envisaged on both sides of the plant road.

Repair and Maintenance Shop: For running repairs and conditioning

monitoring.

DRI Unit: For the production of Sponge Iron of the required capacity.

Power Plant Unit: For the Captive production of Power from the Hot

Gases of DRI Unit.



Steel Melting Shop Unit: For the production of Billets/Ingots of the

required capacity.

Rolling Mill Unit: For the production of Steel Product/TMT Bars of the

required capacity.

Finished Product Stock Yard: For the final product from Rolling Mill

having capacity to store one month Stock.

Quality Control Check: For the inspection of the final product before

dispatch.

Product Load out Station: The finished product after Quality Control

check can be load into trucks for dispatch to customers.

PLANT LAYOUT



5. CAPACITY PLANNING

DRISteel

Melting Shop

Rolling Mill

Configuration2 Kiln x 100 TPD

2 Furnace x 8 T

80 MT

Hours per Shift 8 8 8

No. of Shifts in a day 3 3 3

No. of Days in a Year in Operation

300 330 350

Production per Day in MT

200 242 228

Installed Capacity in MTPA

60000 80000 80000

Final ProductSponge

IronBillets/Ingots

TMT Bars or Rolled Products

Maximum Capacity Utilization

85% 85% 85%

No. of Days required for Maintenance in a year

65 35 15

Inventory one

month stock

one month stock

one month stock

Note: For the smooth production line one Kiln of DRI Unit and one furnace of

SMS will always be in the production during any of the maintenance period which will help to achieve the target or fulfill the customers demand.

One month stock will be kept in advance at Raw Material Yard for the smooth production.

Finished Products (TMT Bars) can be sold in the open market. In view of adequate demand in the Eastern Region and does not foresee any problem in marketing the above products.



The domestic demand-supply scenario is favorable and the strategy would be to target domestic market for optimizing marketing costs.

Agreement for Long term contracts with downstream players to minimize marketing costs.

6. PRODUCTION & OPERATION PLANNING

Year Wise Production Planning

Year 1 Year 2 Year 3

Installed Capacity

- DRI Unit 60000 60000 60000

- SMS Unit 80000 80000 80000

- Rolling Mill 80000 80000 80000

Utilization during the year

- DRI Unit 70% 80% 85%

- SMS Unit 70% 80% 85%

- Rolling Mill 70% 80% 85%

Production during the Year

- DRI Unit (Transfer to SMS) 42000 48000 51000

- SMS Unit (Transfer to Rolling) 56000 64000 68000

- Rolling Mill 56000 64000 68000

One Month Finished Stock

- DRI Unit 3500 4000 4250

- SMS Unit 4667 5333 5667

- Rolling Mill 4667 5333 5667

Available for Sale

- Rolling Mill (TMT) 51333 58667 62333



Raw Material Requirement for the Production and their source

Proportion

DRISteel

Melting Shop

Rolling Mill

Sources of Raw

Materials

Iron Ore in MTPA

1.69600

0- -

Will be sourced

from mines of Orissa

Coal in MTPA 1.48400

0- -

Locally Available

Dolomite in MTPA

0.05 3000 - -Locally

Available

Sponge Iron in MTPA (Will be transferred from DRI Unit)

0.75 - 60000 -Will be

produced in house

Pig Iron in MTPA 0.25 - 20000 -

Locally Available from the market

Scrap in MTPA 0.10 - 8000 -

Locally Available from the market

Billets/Ingots in MTPA (will be transferred from Steel Melting Shop Unit)

1.00 - - 80000Will be

produced in house

* MTPA – Metric Tonnes per Annum

Measures to increase Productivity

Maximum Utilization of the Capacity



Improved Raw materials – Right quality Improved working conditions – Cleanliness, lighting, ventilation, etc., Improved Machines (Technology) – Efficient & economic machines Provision of Incentives – Productivity linked bonus / Reward etc.

7. QUALITY REQUIREMENT

To specify the various physical and mechanical properties of the finished

product, various tests, both destructive and nondestructive, need to perform.

Major quality requirements

These process characteristics

necessitate a proper manufacturing

quality of cold forging quality wire

rods. The important features of

these quality requirements are as under:

Excellent surface quality ensuring zero defect situation so that forged

components have no defects.

Good control over Quality to ensure smooth forging process.

Good control over mechanical properties such as tensile strength and

reduction area to ensure proper cold forgeability and productivity.

Completely de-scaled surface to avoid forging defects such as scale

pits and resultant surface roughness.

Suitable metallurgical structure to ensure proper machinability level.

Good and uniform response to heat treatment since the components

are always treated in bulk



8. QUALITY ASSURANCE AND QUALITY CONTROL PLAN

Quality assurance of analysis is often

demanded by a wide range of users interested

in the analysis of raw steel or finished steel

products.

The most important factor required by any

quality assurance is the accuracy of analysis making it possible for all values

analyzed to meet authorized standards. The second most important factor is

the ease of tracking back to find when, how, by who, and under what

conditions or environments the analysis was made.

In order to satisfy these factors, the above tasks must be standardized and

prepared in writing as guidelines or references. Their contents must provide

steps to make it possible to ensure that the results of analysis will be

obtained by taking the provided steps.

Quality Planning is a critical part of any project. It enables to agree a set of

quality targets with the customer. It then helps to monitor and control the

level of quality produced by the project; ensure to meet the quality targets

set.

Following are the Quality Control Plan:

1. Manufacturing stage and analysis position: Standards for the

analysis position and timing at manufacturing stage according to the

product.

2. Sampling and analysis instructions: Standards for the elements to

be analyzed, the precision of analysis, and the types of samples

required.



3. Analysis method selection: Standards for the selection method of

analysis based on the expected quantities of analysis elements,

required precision of analysis, and required time of analysis.

4. Analyzer operation maintenance: Standards for the operation,

maintenance, and improvement methods of the analyzer

5. Analysis result reporting: Standards for the means and destinations

of correct analysis results to be reported.

6. Regular Inspection: Inspection once in a day or once in a week.

A Quality Plan helps to schedule all of the tasks needed to make sure that the

project meets the needs of customer. It comprises two parts; the Quality

Assurance Plan lists the independent reviews needed and the Quality Control

Plan lists the internal reviews needed to meet the quality targets. By using

Quality Assurance and Quality Control techniques, one can create a

comprehensive Quality Management Plan for the project.

Quality Plan to set quality targets by:

Identify Standards and Guidelines Evaluate Requirements Analysis Process Feasibility Study Identifying the customers’ requirements Listing the project deliverables to be produced Setting quality criteria for these deliverables Defining quality standards for the deliverables Gaining your customers agreement with the targets set

Using this Quality Plan to monitor and control quality by:

Analyzing Test Results Production Readiness Review Acceptance Test Review Identifying the quality control tasks needed to control quality Creating a Quality Control Plan, by scheduling the control

activities Listing the quality assurance activities required to assure quality Building a Quality Assurance Plan, by creating an activity schedule


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