“MARKETING OF SECONDARY PRODUCTS AND BY-PRODUCTS”

AT
BOKARO STEEL PLANT (SAIL)
BOKARO

Submitted By
Neeraj Kumar
Roll No: 9202068
Under the Guidance of
GOBIND BARMAN
MBA (MARKETING) 2009-11
KSOM, KIIT UNIVERSITY,BHUBANESWAR

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 Acknowledgement

An endeavor is not accomplished and successful till the people who have made it
possible are given due credit for making it possible. I take this opportunity to thank all
those who have made the endeavor of mine successful.

First and foremost, I am very thankful to all the officers of Bokaro steel plant who really
helped a lot and guided me throughout my training session, without their help I would
have been unable to complete my project. These people have really been kind enough in
providing me with all kinds of contextual information.

I would like to thank Mr. A.J. KACHHAP (DGM, STORE), K.K. SANYAL (AGM,
BPP), Mr. N. KHASNOBIS (Sr. Manager, SSD), Mr. A.K. MISHRA (AGM, S &
C) , Mrs. Meena Kamal (Sr. Manager, Marketing) and Mr. Gobind Barman (Jr.
Manager, Marketing).

They all guided with their seasoned approach towards my training.

I also express my thanks to the officers and staffs of the training institute, Bokaro Steel
Plant.

Neeraj Kumar

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 INDEX

1. Executive summary
Page No 4-5

2. Objective of the study

Page No 6

3. Methodology used
Page No 7

4. Introduction
Page No 8-54

5. Marketing dept. of BSL

Page No 55- 85

6. Data Analysis
Page No 86-93

7. SWOT Analysis
Page No 94-95

8. Findings
Page No 96-97

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 9. Suggestions & Recommendations
Page No 98-99

10. Conclusion
Page No 100

11. Abbreviation
Page No 101

12. Bibliography
Page No. 102

Executive
Summary
The present study was undertaken to understand the details of the mode of marketing of
Secondary Products of SAIL. Marketing Department of BSL (SAIL) strives to design a
systematic framework to ascertain a profitable proposition out of the selling efforts of
secondary and by products.

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The survey was conducted in Marketing Department and Sales Coordination
department(up to some extent). I had to find how auctions, fixed price, and tenders are
used for marketing purpose of BSL.

Various steps involved are as follows:

1) To know about the e-auctions of marketing department.
2) To know the exhaustive usage of e-auctions to affect deals.

60% marketing and selling is done through auction and rest is taken through fixed price,
selling and tenders.

Data were mainly collected from marketing department of BSL.

BSL is the largest Steel manufacturing sector of India and is top ranked in the global
fortune 500 companies.

During my training, I had to find out mode of sale of secondary products of BSL. Primary
products are sold by CMO, Delhi. I passed through various stages of problems and
difficulties to accomplish the task of project work but it was a privilege for me to take
this opportunity and challenging work to study and observe "marketing of Secondary
products in B.S.L".

Bokaro Steel Plant recognizes that leadership is essential for survival in competitive
environment; Customer's satisfaction ,like quality, is a journey and not a destination. It is
essential that everyone in the company has a clear understanding of what customer
satisfaction means, if the plant aims to achieve leadership in customer satisfaction. While
improved customer satisfaction is necessary for ensuring prosperity of the company, it
must also be recognized that ability of the company to satisfy its customers would depend
on its ability to continuously improve its profit and growth.

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The basic objective behind the study carried out by me is to study the major contribution
of Secondary product to total sales, which is helpful for the success of the company. By
selling the secondary products in local market company is earning profits. It is also
creating employment in small scale industries and is therefore instrumental in developing
the economy.

OBJECTIVE OF THE
STUDY
In ,Bokaro steel plant, there are various sections of marketing department. Since I have
chosen "Marketing of secondary products in B.S.L." my main objectives are:

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1. To know what is secondary product and why is it necessary to sell the secondary
product.
2. To know the use of secondary product.
3. To study the marketing of secondary product in BSL.
4. To know the pricing of secondary product.
5. To know the processes used to ensure timely dispatch of material, products, scrap etc
to the customers.
6. To know the others terms and conditions for marketing of secondary products.

METHODOLOGY
USED
The methodology adopted by me during the project on "Marketing of Secondary Product
on B.S.L" can be divided into two parts:

(A) To know about the organization

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(B) To know about the procedure and working of Marketing Department and Secondary
Section.

(A) To know about the organization. Information / data has been

collected from:-
(i) Government Publications.
(ii) Books of organization.
(iii) Journal.
(iv) Company Website.

(B) To know about the procedure and working of Marketing Department and Secondary
Section information has been collected by:
(a) Observation Method
(b) Personal Interview with
(i) AGM
(ii) Senior managers
(iii) Managers
(C) Documents provided by them.

SAIL

STEEL AUTHORITY OF INDIA LTD

8
INTRODUCTION TO SAIL

Steel Authority of India(SAIL) consists of several Steel Plants that are integrated and
otherwise in nature. It caters to the humongous need of railways, automotive,
engineering, and power sectors of the country. Moreover, it satisfies the requirements of
its foreign clients also whenever they demand its support.

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During the struggle for independence, Pt. Jawaharlal Nehru, our first Prime Minister,
had a very clear vision about the role of Steel in the development of our country.
Although TATA Iron & Steel Company (TISCO) has been establishment in 1907
marking the beginning of Indian Steel Industry followed by Indian Steel Co. (1918), they
were too small to meet the development requirements of a big country like ours.
Therefore, in the 1st Industrial Policy Resolution of the Govt., soon after independence,
Govt. decided to establish Steel Plants in Public Sector. However, work could be started
at fast pace only in 1954, when Hindustan Steel Ltd., was formed and three Steel Plants
of 1 MT capacity each, were established with provision of further expansion at Bokaro,
Rourkela and Durgapur with assistance from USSR, West Germany and U.K.
respectively.

To improve the functioning of Steel Industry, Govt. decided to form a holding company
during 1972, which was named as Steel Authority of India Ltd., (SAIL) and the same was
incorporated on January 24, 1973, with an authorized capital of Rs.2000 crores.

SAIL was formed by registration of a company under the companies Act and not by the
Act of Parliament. Govt. decided to abandon the holding company concept in 1978 and a
bill was presented to the Lok Sabha. Accordingly, SAIL was again recognized in the
following manner.

Hindustan Steel Ltd., Bokaro Steel Ltd., Salem Steel Ltd., SAIL International Ltd., Bhilai
Ispat Ltd., Rourkela Ispat Ltd., Durgapur Ispat Ltd., wholly owned subsidiaries of SAIL
merged into it and started functioning as Units of SAIL.
MECON, HSCL and NMDC become independent Companies and started functioning
under Ministry of Steel. However, Kiriburu and Meghatuburu Iron Ore Mines were
attached with BSL as their Captive Mines.
Bharat Refectories Ltd. also became independent under the Ministry of Steel and
refractory units also came under them.
Thus, SAIL, at present, is having capacity of 12 MT of crude steel through its four
integrated Steel Plants, at Bokaro, Bhilai, Durgapur and Rourkela. Two special steel

10
plants at Durgapur and Salem produce a wide range of alloy and special steels. Marketing
of the products from these plants is done through a country wide distribution network
consisting of a chain of Stock Yards and distribution network.

SAIL today is one of the largest industrial entities in India. Its strength has been
the diversified range of quality steel products catering to the domestic as well as the
foreign markets and a large pool of technical and professional expertise.

Ranked amongst the top ten public sector companies in India in terms of
turnover, SAIL manufactures and sells a broad range of steel products, including hot and
cold rolled sheets and coils, galvanized sheets, structural, railway products, plates, bars
and rods, stainless steel and other alloy steels. SAIL produces iron and steel at four
integrated plants and three special steel plants, located principally in the eastern and
central regions of India and situated close to domestic sources of raw materials, including
the Company’s iron ore, limestone and dolomite mines.

SAIL’s wide range of long and flat steel products are much in demand in the domestic as
well as the international market. This vital responsibility is carried out by SAIL’s 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.

With technical and managerial expertise and know-how in steel making gained over four
decades, SAIL’s Consultancy Division (SAILCON) at New Delhi offers services and
consultancy to clients world-wide.

SAIL has a well-equipped Research and Development Centre for Iron and Steel (RDCIS)
at Ranchi which helps to produce quality steel and develop new technologies for the steel
industry. Besides, SAIL has its own in-house Centre for Engineering and Technology
(CET), Management Training Institute (MTI) and Safety Organization at Ranchi. SAIL’s
captive mines are under the control of the Raw Materials Division in Calcutta. The

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Environment Management Division and Growth Division of SAIL operate from their
headquarters in Calcutta. Almost all SAIL’s plants and major units are ISO Certified.

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

INTEGRATED STEEL PLANTS

1. Bokaro Steel Plant (BSL) in Jharkhand

2. Durgapur Steel Plant (DSP) in West Bengal
3. Rourkela Steel Plant (RSP) in Orissa
4. Bhilai Steel Plant (BSP) in Chhattisgarh

SPECIAL STEEL PLANTS

1. Alloy Steel Plant (ASP) in West Bengal

2. Salem Steel Plant (SSP) in Tamil Nadu
3. Visvesvaraya Iron & Steel Plant (VISL) in Karnataka

SUBSIDIARIES

1. Indian Iron & Steel Company Limited (IISCO) in West Bengal.

2. Maharashtra Electrosmelt Limited (MEL) in Maharashtra

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OTHER UNITS

 Raw Material Division (RMD) at Kolkata, West Bengal

 Central Marketing Organization (CMO) at Kolkata, West Bengal
 SAIL Consultancy Division (SAILCON) at New Delhi
 Research & Development Centre for Iron & Steel (RDCIS)
at Ranchi, Jharkhand
 Centre for Engineering & Technology (CET) at Ranchi, Jharkhand
 Management Training Institute (MTI) at Ranchi, Jharkhand
 Central Power Training Institute (CPTI) at Rourkela, Orissa
 SAIL Safety Organization (SSO) at Ranchi, Jharkhand
 Environment Management Division (EMD) at Kolkata, West Bengal
 Growth Division (GD) at Kolkata, West Bengal
 Central Coal Supply Organization (CCSO) at Dhanbad, Jharkhand

ABOUT METAL JUNCTION

Corporations across the world have realized that in a world without boundaries, certain
regions and people with distinct competencies will be more efficient than others and
therefore the visible trend in the world today is outsourcing. Companies are outsourcing
manufacturing activities, customer services, back office operations and a host of other
activities, either because there is someone else who can do the same thing for less, or,
there is specialist who can offer services of higher quality. Industry has recognized that
whilst it has to concentrate on growth, a prerequisite is to become globally competitive.
Industry has to, on the one hand, concentrate on its core competencies of bringing about
efficiencies in manufacturing and on the other hand look at bringing about efficiencies in
13
their Supply Chain which is their buying and selling processes. Metal-junction operates at
the extreme ends of the value chain and hence it was essential to segregate the
organization into two Major Business Units (Commerce-junction and Metal-junction) so
as to independently focus on:

Specific Requirements of Clients/Customers

Specific procedures for both the functions
Knowledge and Information management for the two functions

OTHER UNITS OF SAIL

RAW MATERIAL DIVISION

The Raw Material Division (RMD) was formed in 1989 with headquarters in Kolkata for
Iron Ore Mines
management of all the captive mines of the SAIL steel plant in the eastern sector. This
hasMines
enabled rationalization State
of raw material supply to Annual capacity
the different (MT)
plants in the region and
achievement of systematic reduction in purchase of iron ore from non-captive sources.
Kiriburu Jharkhand 4.25
Presently, RMD manages five iron ore mines in Jharkhand and Orissa, and four limestone
andMeghahatuburu
dolomite quarries in MadhyaJharkhand
Pradesh, Jharkhand and Orissa. 4.30

Bolani Orissa 3.00

Barsua Orissa 14 2.01

Kalta Orissa 1.15

RMD is planning to expand capacity in view of the enhanced production plans of the
steel plants and cope with the requirement of high quality iron ore.

The Lime stone quarries under RMD are located at Kuteshwar, Purnapani and
Bhawnathpur. Dolomite quarry is at Tulsidamar.

RMD has centralized workshop at Bolani for repair/overhauling of engines &

transmission of heavy earthmoving machinery operating at the mines.

Besides the above, RMD has three customer service office at Rourkela, Durgapur and
Bokaro for coordination with the steel plants. Two liaison offices are also maintained at
Bhubaneshwar and New Delhi for better coordination with government agencies and
other statutory authorities.

CENTRAL COAL SUPPLY ORGANISATION

Situated at Dhanbad in Jharkhand, the Central Coal Supply Organization (CCSO) of

SAIL’s Operations Directorate, is entrusted with the vital responsibility of ensuring daily

15
movement of around 12000 tons each of washed coking coal and power –grade coal to all
sail steel plants.

CENTRAL MARKETING ORGANISATION

The ISO 9001:2000 certified Central Marketing Organization (CMO) is India’s largest
industrial marketing set up that markets carbon steel produced by the four integrated steel
plants of SAIL. Headquartered in Kolkata, it transacts business through its network of 34
branch sales offices spread across the four regions, 24 Warehouses equipped with
mechanized handling systems, 11 Customer Contact Offices and 15 Consignment Agents.
CMO’s domestic marketing effort is supplemented by its ever widening network of
authorized and rural dealers who meets the demands of the smallest customers in the
remotest corners of the country. A strong IT support system enables real time network
connectivity within the entire CMO network.

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Extensive customer contact, product and segment specialization, close monitoring of
order servicing and feedback analysis through the Customer satisfaction Index are
established norms at CMO. The customer friendly approach of CMO is backed by
practical after sales service.

Through the process of Key Account Management, CMO provides single window service
to key customers across the country for every business transaction from enquiry to order
booking, order tracking to delivery, and even consultancy after-sales service.

Central Marketing Organization (CMO) is India's largest marketing home. It has spread
its wings far and wide from Srinagar in the North to Cochin in the South and Dhimapur in
East to Ahmedabad in the west.

All SAIL Product are marketed in India through C.M.O. to ensure quality and prompt
dispatch of product, CMO keeps in touch with producing units as well as the transport
and shipping sectors. It operates through the network of stockyards, dockyards, Branch
sales offices, consignment agents and Extension counter.

CMO has got responsibility to sell pig iron and mild steel products manufacture by BSL,
DSP, RSP, and BSL, having its headquarters at Ispat Bhavan, 40 Chouringee Road,
Kolkata 71. CMO Branches spread throughout the country with stockyards for storing
and selling Iron & Steel materials of the plants.

Branch manager having other colleagues including finance executive to help Branch
Manager in day-to-day operations.

The network of branches is divided into Four regions as given below: -

Regions Branches Attached

Northern region, New Delhi Agra, Allahbad, Faridabad, Gaziabad,

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 Kanpur, Lucknow, Delhi, Chandigarh,
Jalandher, Jammu
Ludhiana and Mandi Govindgarh.
Western Region, Ahmedebad, Baroda, Pune, Mumbai,
Mumbai Nagpur,Bokaro, Indore, Gwalior, Jabalpur,
Jaipur & Kota.
Eastern Region, Bhubaneshwar, Bokaro, Kolkatta,
Kolkata Durgapur Guwahati, Howarh, atna, New
Bongaigoan & Rourkela.
Southern Region, Bangalore, Chennai, Cochin, Coimbatore,
Chennai Hyderabad, Pondicherry, Trichy & Vijayawada

In addition to above, one zonal office is functioning in Guwahaati. CMO has got transport
and shipping department at Visakhapatnam to handle the export and import consignment
at the different ports.

FUNCTIONS OF BRANCHES

I) Booking of orders from the customers on long term and short-term basis.
II) Passing on details of booking to the concerned SRM Office.
III) Receipt of materials at stockyard by wagons/trucks.
IV) Issuance of offers and delivery orders to customers against their booking.
V) After sale services to customers.

With increasing competition and business scenario, it is their endeavor to increase the
market share and customer satisfactions have appointed KAMs- Key Account Managers
at the branch level and operations at branch level have been segmented on the type of
product-Flat or long. CMO is divided on Long and Flat basis as both types of products
have to be dealt in different manner due to nature of application and varied uses.

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Similarly, for better customer satisfaction, Customer Satisfaction Index (CSI) has to be
measured for the Key Account Customers. The Key Account Customer has been
identified on branch and national level and TMI and KAM of CMO are following these
customer's orders. AT plant level, PAC and PIC are appointed who have full knowledge
of products and process. The production and coordination meeting is held in the last week
of preceding month to decide the final product mix.

FUNCTION OF STOCKYARDS

i) Keeping records with regards to receipt of materials with description of

size, quality and quantity etc.
ii) Issuance of loading slip on receipt of delivery order from the branch.
iii) Loading of materials in the customer truck/trailer free of cost.
iv) Issuance of delivery challans-cum-invoice for the quantity delivered.
v) Handing over Test Certificate to customer along with challans.
vi) Submission of stock statement to the branch.
CMO’s International Trade Division (ITD)

In New Delhi exports iron & steel products of SAIL’s four main integrated steel plants
and maintain close liaison with buyers abroad. ITD has successfully established SAIL’s
reputation as a producer of quality steel products and a consistent supplier across the five
continents. Among the notable destinations are China , Korea, USA, Canada, Philippines,
Indonesia, Malaysia, Saudi Arabia, Iran UAE, Europe(UK, Italy, Spain, Germany),
Taiwan, Japan, Thailand and Singapore, as well as neighboring countries like Sri Lanka,
Myanmar, Nepal and Bangladesh, etc.

The critical function of ensuring efficient and proper dispatch of export materials and
timely import of raw materials to maintain the pace of production of the SAIL, plants is
performed by CMO’s Transport & Shipping Division (T&S). Headquartered at Kolkata,
T&S has branch offices at Haldia, Paradip and Vizag ports.

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Both ITD and T&S are accredited with ISO 9001:2000 certification.

JOINT VENTURE

SAIL has promoted joint ventures in different areas ranging from power plants to e-
commerce.

• NTPC SAIL Power Company Pvt. Ltd

Set up in March 2001, this 50:50 joint venture between SAIL and the National
Thermal Power Corporation (NTPC) operates and manages the Captive Power Plants-
II of the Durgapur and Rourkela Steel Plants which have a combined capacity of 240
MW.

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• Bokaro Power Supply Company Pvt. Limited

This 50:50 joint venture between SAIL and the Damodar Valley Corporation formed
in January 2002 is managing the 302-MW power generation and 1880 tons per hour
steam generation facilities at Bokaro Steel Plant.

• Bokaro Electric Supply Company Pvt. Limited

150 Another SAIL-NTPC joint venture on 50:50 basis formed in March 2002
manages the 74 MW Power Plant-II of Bokaro Steel Plant which has additional
capacity of producing tones of steam per hour.

• UEC SAIL Information Technology Limited

This 40:60 joint venture between SAIL and USX Engineers & Consultants, a
subsidiary of the US Steel Corporation, promotes information technology in the steel
sector.

• Metaljunction.com Private Limited

A joint venture between SAIL and Tata Steel on 50:50 bases, this company promotes
e-commerce activities in steel and related areas.

• SAIL-Bansal Service Center Pvt. Ltd.

SAIL has formed a joint venture with BMW industries Ltd. on 40:60 bases to
promote a service centre at Bokaro with the objective of adding value to steel.

• North Bengal Dolomite Limited

A joint venture between SAIL and West Bengal Mineral Development Corporation
ltd on 50:50 basis was formed for development of Jayanti Dolomite Deposit,
Jalpaiguri for supply of Dolomite to DSP and other plants.

• Romelt-SAIL (India) Ltd

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 Romelt Technology developed by Russia for reducing of iron bearing materials,
which is carried out with carbon in single A joint venture between SAIL, National
Mineral Development Corporation (NMDC) and Russian promoters for marketing
stage reactor with the use of oxygen.

• Bhilai JP Cement Ltd

SAIL has also incorporated a joint venture company with M/s Jaiprakash Associates
Ltd to set up a 2.2 MT cement plant at Bhilai. Likely to commence operations by
March'2010.

PRODUCTS

SAIL’S MAJOR PRODUCTS

SAIL has a wide range of steel products - both Long and Flat.
Among Long products are: Structurals, Crane Rails, Bars, Roads & Rebars, and Wire
Rods; and Flat products covering the range of HR Coils, Sheets & Skelp, Plates, CR Coils
& Sheets, GC Sheets/GP Sheets and Coils, Tinplates, Electrical Steel. SAIL also
produces Tubular products and Railway products such as rails, wheels, axles and wheel
sets.

Other products of SAIL include Pig iron and Fertilizers such as Calcium Ammonium
Nitrate ("Sona"), Ammonium Sulphate ("Raja") and Coal Chemicals like Benzene,
Toluene, Xylene etc.

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 Product Wise
Semis Blooms, Billets & Slabs

Long Products Structural

Crane Rails
Bars, Rods & Rebars
Wire Rods

Flat Products HR Coils, Sheets & Skelp

Plates
CR Coils & Sheets
GC Sheets\ GP Sheets and Coils
Tinplates
Electrical Steel

Tubular Pipes
Products
Railway Rails
Products Wheels, Axles, Wheel Sets

Plant Wise
Bokaro Steel Plant HR Coils & Sheets
Plates
CR Coils & Sheets
GP Sheets & Coils/ GC Sheets

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 Pig Iron, Chemicals & Fertilizers

Durgapur Steel Plant Blooms, Billets & Slabs

Joists, Channels, Angles
Bars, Rods & Rebars
Skelp
Wheels, Axles, Wheel Sets Pig Iron,
Chemicals & Fertilizers

Rourkela Steel Plant HR Coils

Plates
CR Coils & Sheets
GP Sheets/ GC Sheets
Tinplates
Electrical Steel
Pipes
Pig Iron, Chemicals & Fertilizers

Blooms, Billets & Slabs Beams

Bhilai Steel Plant
Channels, Angles
Crane Rails
Plates
Rails
Pig Iron, Chemicals & Fertilizers

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Products
Hot Rolled Coils, Sheets and Skelp

Hot rolled coils, sheets and skelp (narrow coil), are

the largest product category of the company in terms
of both sales volume and revenue. Hot rolled coils
are primarily used for making pipes and have many
direct industrial and manufacturing applications,
including the construction of tanks, railway cars,
bicycle frames, ships, engineering and military equipment and automobile and truck
wheels, frames and body parts. Hot rolled coils are also used as feedstock for cold rolling
mills where they undergo further processing. Hot rolled coils are also delivered to the
company's own cold rolling mills and silicon sheet mill and pipe plant in a wide range of
widths and thicknesses as the feedstock for higher value-added steel products. The
company is the largest producer of hot rolled coils, sheets and skelp in India.

Semi-Finished Products

The company produces semi-finished products,

including blooms, billets and slabs, which are

25
converted into finished products in the company's processing plant and, to a lesser extent,
sold to rerollers for conversion to finished products.

Plates

Steel plates are used mainly for the manufacture of bridges, steel structures, ships, large
diameter pipes, storage tanks, boilers, railway wagons and pressure vessels. The company
also produces weatherproof steel plates for the construction of railcars. The company is
currently the largest producer of steel plates in India with a domestic market share of
more than 80 per cent for these products. The company is the only producer of wide and
heavy plate products in India.

Cold Rolled Products

Cold rolling of hot rolled products produces a

superior surface finish, improves the physical
properties of the steel, such as tensile strength, and
reduces its thickness to precise gauges. As a result,
cold rolled products generally command higher prices than hot rolled products. The
products of the cold rolling mill include cold rolled sheets and coils, which are used
primarily for precision tubes, containers, bicycles, furniture and for use by the automobile
industry to produce car body panels. Cold rolled products are also used for further
processing, including for color coating, galvanizing and tinning. The company also
produces further processed cold rolled products, including galvanized sheets and tin
plates.

Railway Products

Railway products, including rails, wheels and axles, sleeper and fish plates (which are
used to connect and strengthen rails), are produced through a process of hot rolling
blooms in the finishing mills and forging ingots and blooms in the forging press or

26
hammer. Railway products are used primarily to
upgrade and expand the existing railway network
in India.

Structurals

Structural steel products are produced through a

process of hot rolling in the section or structural
mills. They are long steel products with cross
sections of various shapes. I-beams, channels and
angle steel are used in mining, the construction of
tunnels, factory structures, transmission towers,
bridges, ships railways and other infrastructure
projects.

Bars and Rods

The company produces steel bars and rods through a process of hot rolling billets in the
finishing mills. Reinforcement steel and wire rods are primarily used by the construction
industry. The company is one of the largest producers of reinforcement bars in India
which are primarily sold to the construction industry.

Speciality Products

Speciality products include electrical sheets, tin plates and pipes. Electrical sheets are

27
cold rolled products of silicon steel for electrical
machinery. Tin plates are cold rolled steel
electrolytically coated with tin for food packaging. Pipes
are longitudinally or spirally welded from hot rolled
coils for conveying such things as water, oil and gas.

Alloy and Stainless Products

In addition to the steel products indicated above, SAIL produces a wide range of alloy
steel products at ASP, SSP and VISL. Elements including chromium, nickel, vanadium
and molybdenum are used in the alloy mixture to impart special properties to steel. These
alloy steels are primarily used for sophisticated applications, including in the automobile,
railway and defense industries.

A wide variety of alloy and stainless steel plates, hot rolled sheets, cold rolled sheets,
bars, billets, blooms, forgings and die blocks are manufactured at ASP in an Electric Arc
Furnace. SAIL is able to produce different qualities of alloy steels to meet the
requirements of its customers. To increase steel's corrosion resistance properties, nickel
and chromium are used in the making of stainless steel. SSP produces cold rolled
stainless steel coils and sheets with thickness ranging from 0.3 mm to 6 mm and width
ranging from 500 mm to 1,250 mm. These materials can be produced in a large number
of grades for different applications. Stainless steel products are used for diverse
applications including household utensils, automobile trims, conveyor belts, elevators,
chemical and food processing equipment, building and interior decoration and
pharmaceutical equipment.

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MAJOR COMPETITOR'S
 TISCO
 Essar Steel
 Jindal Vijaynagar Steels ltd.
 Jindal strips ltd
 Jisco
 Saw pipes
 Uttam steels ltd
 Ispat Industries ltd
 Mukand ltd
 Mahindra Ugine steel company ltd
 Tata SSL ltd
 Usha Ispat ltd
 Kalyani Steel ltd
 Electro steel Casting ltd
 Sesa Goa ltd
 NMDC
 Lloyds Steel Industries ltd

29
BOKARO STEEL PLANT
A PARTNER IN NATION BUILDING

30
INTRODUCTION
Bokaro Steel Plant - the fourth integrated plant in the Public Sector - started taking shape
in 1965 in collaboration with the Soviet Union. It was originally incorporated as a limited
company on 29th January 1964, and was later merged with SAIL, first as a subsidiary and
then as a unit, through the Public Sector Iron & Steel Companies (Restructuring &
Miscellaneous Provisions) Act 1978. The construction work started on 6thApril 1968.

The Plant is hailed as the country’s first Swadeshi steel plant, built with maximum
indigenous content in terms of equipment, material and know-how. Its first Blast Furnace
started on 2nd October 1972 and the first phase of 1.7 MT ingots steel was completed on
31
26th February 1978 with the commissioning of the third Blast Furnace. All units of 4 MT
stage have already been commissioned and the 90s' modernization has further upgraded
this to 4.5 MT of liquid steel.

The new features added in modernization of SMS-II include two twin-strand slab casters
along with a Steel Refining Unit. The Steel Refining Unit was inaugurated on 19th
September, 1997 and the Continuous Casting Machine on 25th April, 1998. The
modernization of the Hot Strip Mill saw addition of new features like high pressure de-
scalers, work roll bending, hydraulic automatic gauge control, quick work roll change,
laminar cooling etc. New walking beam reheating furnaces are replacing the less efficient
pusher type furnaces. A new hydraulic coiler has been added and two of the existing ones
revamped. With the completion of Hot Strip Mill modernization, Bokaro is producing top
quality hot rolled products that are well accepted in the global market.
Bokaro is designed to produce flat products like Hot Rolled Coils, Hot Rolled Plates, Hot
Rolled Sheets, Cold Rolled Coils, Cold Rolled Sheets, Tin Mill Black Plates (TMBP) and
Galvanized Plain and Corrugated (GP/GC) Sheets. Bokaro has provided a strong raw
material base for a variety of modern engineering industries including automobile, pipe
and tube, LPG cylinder, barrel and drum producing industries.

Directions

Bokaro Steel is working towards becoming a one-stop-shop for world-class flat steel in
India. The modernization plans are aimed at increasing the liquid steel production
capacity, coupled with fresh rolling and coating facilities. The new facilities will be
capable of producing the most premium grades required by the most discerning customer
segments.

Brand Bokaro will signify assured quality and delivery, offering value for money to the
customers.

32
VISION
To be a respected world–class corporation and the leader in Indian Steel business in
quality, productivity, profitability and customer satisfaction.

CORE VALUES OF SAIL

Core Values

Customer Consistent Commitment

Concern for
Satisfaction Profitability of Excellenc
People e

HUMAN RESOURCE

SAIL’s total manpower at the end of 30 April, 2009 stood at around 26,288.

The company’s labor productivity 244.02 tones/man/year as on 30.04.09.

BOKARO STEEL PLANT

Raw Materials & Material Handling Plant

33
The Raw Materials and Material Handling Plant receives blends, stores and supplies
different raw materials to Blast Furnace, Sinter Plant and Refractory Materials Plant as

per their requirements. It also maintains a buffer stock to take care of any supply
interruptions. Some 9 MT of different raw materials viz. Iron ore fines and lumps,
Limestone (BF and SMS grade), Dolomite lumps and chips, hard Coal and Manganese
ore are handled here every year.

Iron ore and fluxes are sourced from the captive mines of SAIL situated at Kiriburu,
Meghahataburu, Bhawanathpur, Tulsidamar and Kuteshwar. Washed coal is supplied
from different washeries at Dugda, Kathara, Kargali and Giddi, while raw coal is
obtained from Jharia coalfields.

Coke Oven & By-product Plant

34
35
The Coke Oven Complex at Bokaro converts prime coking coal from Jharia, Dugda and
Moonidih and medium coking coal form Kargali, Kathara and Mahuda, blended with
imported coal, into high quality coke for the Blast Furnaces.
Coals came in wagon in the plant and then unload with the
help of wagon tippler. At Tippler single wagon fix up and
then tippler turn to 180 degree and coal store into
underground storage and after that coal sent to SILO which is
permanent storage place of coal, through conveyor belt.
There are 46 no. of SILO in BSL and one SILO has capacity
of 2500 ton.

Currently there are two Tipplers working at BSL.

From SILO coal has sent to coal hammering section where coal crushing has done and
then coal has sent to battery charger section where coal were charge at 1200 degree
centigrade in battery oven and that process take 18 hrs to give output of 18 ton coke from
input of 22.8 ton of coal.
There are 8 batteries at BSL but only 6 are in working
condition. One battery contains 69 ovens. One oven has
capacity to take 22.8 ton of coal in one time.
After coke making process has completed it will unload into
quenching car and cooling process has done through phenol
water for 2 min 35 sec. then coke will sent to coke wharf
section where dolomite has mix with coke and then it will
sent to coke crushing section where coke has crushed and it
will take three sizes 0-10mm, 10-25mm and 25-80mm. In coke screening section
different sizes of coke were separated. The coke has size of 25-80mm has use in Blast
Furnace.

36
At the time of making of coke, carbon mono oxide gas has produced because of chemical
reaction. This CO gas will be further proceeding and that produced different type of By-
product.
Ammonium liquor has used for washing of CO which produces COALTAR which has
sent to TAR distillation plant where different type of TAR product produces like hard
pitch, soft pitch, naphthalene etc. and through exhauster CO has sent to ammonium
sulphate section where Amonia Sulphate has produced which is used as fertilizer. Then
further washing of CO produces Benzene product at Benzene recovery section. Once
Carbon Mono Oxide has washed it will used as major fuel in different section of the
plant.

Blast Furnaces

37
Bokaro has five 2000-cubic meter Blast Furnaces that produce molten iron - Hot Metal -
for steel making currently four are working. Bell-less Top Charging, modernized double
Cast Houses, Coal Dust Injection and Cast House Slag Granulation technologies have
been deployed in the furnaces. The process of iron-making is automated, using PLC
Charging System and Computer Controlled Supervision System. The wastes products like
Blast Furnace slag and gas are either used directly within plant or processed for
recycling / re-use.
At Blast Furnace Iron-ore, Coke,
Limestone and Silicon are put
into charged at furnace as per
requirement from upper side of
the furnace and from bottom, hot
air pressure has given and a
chemical reaction last for 8
hours, known as reduction
process, which produces Molten
Iron and part of Slag.
This Molten Iron known as Hot Metal kept in Mild Steel tub which has refractory coating
inside and sent to Steel Melting Shop.

38
Steel Melting Shops

Hot Metal from the Blast Furnaces is converted into steel by blowing 99.5% pure Oxygen
through it in the LD converter. Suitable alloying elements are added to produce different
grades of steel.

Bokaro has two Steel Melting Shops - SMS-I and SMS-II. SMS-I has 5 LD converters of
130T capacity each. It is capable of producing Rimming steel through the ingot route.
SMS-II has 2 LD converters, each of 300 T capacities, with suppressed combustion
system and Continuous Casting facility. It produces various Killed and Semi-Killed
steels.

Continuous Casting Shop

The Continuous Casting Shop has two double-strand slab casting machines, producing
high quality slabs of width ranging from 950 mm to 1850 mm. CCS has a Ladle Furnace

39
and a Ladle Rinsing Station for secondary refining of the steel. The Ladle Furnace is used
for homogenizing the chemistry and temperature. The concoct machines have straight
moulds, unique in the country, to produce internally clean slabs.

Argon injection in the shroud and tarnish nozzle prevent re-oxidation and nitrogen pick-
up, maintaining steel quality. The eddy current based automatic mould level control,
unique in the country, gives better surface quality. The air mist cooling and continuous
straightening facilities keep the slabs free from internal defects like cracks. The casters
are fully automated with dynamic cooling, on-line slab cutting, de-burring and
customized marking. The shop is equipped with advanced Level-3 automation and
control systems for scheduling, monitoring and process optimization.

CCS produces steel of Drawing, Deep Drawing, Extra Deep Drawing, Boiler and Tin
Plate quality. It also produces low alloy steels like LPG, WTCR, SAILCOR and API
Grades.

Slabbing Mill

40
Slabbing Mill transforms ingots into slabs by rolling them in its 1250 mm Universal
Four-High Mill. The rolling capacity of the Mill is 4 MT per annum. The shop has Hot
and Cold Scarfing Machines and 2800 T Shearing Machine. Controlled heating in
Soaking Pits, close dimensional accuracy during rolling and hot and cold scarfing help
produce defect-free slabs.

Hot Strip Mill

Slabs from CCS and Slabbing Mill

are processed in the state-of-the-art
Hot Strip Mill. The fully automatic
Hot Strip Mill with an annual
capacity of 3.363 million tones has a
wide range of products - thickness
varying from 1.2 mm to 20 mm and
width from 750 mm to 1850 mm.
The mill is equipped with state-of-the-art automation and controls, using advanced
systems for process optimization with on-line real time computer control, PLCs and
technological control systems.

41
Walking Beam Reheating Furnaces, consisting six zones and total length of furnace is
39.5 meter, provide uniform heating of 1250 degree centigrade with reduction in heat
losses, ensuring consistency in thickness throughout the length. High-pressure De-scaling
System helps eliminate rolled-in scale. Edgers in the roughing group maintain width
within close tolerance. The roughing group has a roughing train of a Vertical Scale
Breaker, one 2-high Roughing Stand and four 4-high Universal Roughing Stands. The
finishing group consists of a Flying Shear, Finishing Scale Breaker and seven 4-high
Finishing Stands. Hydraulic Automatic Gauge Control system in the finishing stands
ensures close thickness tolerance. The Work Roll Bending System ensures improved strip
crown and flatness. The rolling speed at the last finishing stand is between 7.5-17.5
meters per second. The Laminar Cooling System is a unique feature to control coiling
temperature over a wide range within close tolerance. The Hydraulic Coilers maintain
perfect coil shape with On-line Strapping system. On-line Robotic Marking on the coil
helps in tracking its identity.

Hot Rolled Coil Finishing

All the Hot Rolled coils from the Hot Strip Mill are received in HRCF for further
distribution or dispatch. HR Coils rolled against direct shipment orders are sheared and
finished to customer-required sizes and dispatched to customers. The material is supplied
as per Indian specifications and many international/ foreign specifications. The shop has
two shearing lines with capacities of 6,45,000 Tones/ year and 4,75,000 Tones/ year
respectively.

Cold Rolling Mill

The Cold Rolling Mill at Bokaro uses state-of-the-art technology to produce high quality
sheet gauge material, Tin Mill Black Plate and Galvanized Products. Cold rolling is done

42
to produce thinner gauge strips of very smooth and dense finish, with better mechanical
properties than hot rolling strips. Rolling is done well below re-crystallization
temperature without any prior heating of the material. The products of CRM are used for
deep drawing purposes, automobile bodies, steel furniture, drums and barrels, railway
coaches, other bending and shaping jobs and coated steels. The CRM complex comprises
of two Pickling Lines (including a high speed Hydrochloric Acid Pickling Line with re-
generation facilities), two Tandem Mills, an Electrolytic Cleaning Line, a Continuous
Annealing Line, Bell Annealing Furnaces, two Skin-Pass Mills, a Double Cold Reduction
Mill (DCR), and Shearing Lines, Slitting Lines and a packaging and dispatch section. The
5-stand Tandem Mill is capable of rolling sheet gauges up to 0.15 mm thickness. It has
sophisticated Hydraulic Automatic Gauge Control, computerized mill regulation and
optimization control.

Hot Dip Galvanizing Complex

The Hot Dip Galvanizing Complex integrated with the CRM produces zinc-coated Cold
Rolled strips resistant to atmospheric, liquid and soil corrosion.

43
The Continuous Coil Corrugation Line in the HDGC produces corrugated sheets and the
Galvanized Sheet Shearing Line produces galvanized plain sheets for a variety of
applications. The first shop of Bokaro Steel to get the ISO-9001 certification way back in
1994, this complex has maintained a high-standard of coating quality and its SAIL JYOTI
branded products enjoy a loyal market.

This complex made certain innovations for higher productivity to help re-build
earthquake-ravaged Gujarat.

There are two coil holders at starting point for maintaining continuity of the machine.
When one coil finished the second started and head & tail of two coils weld together
through welding machine. Then sheet passes through entry storage tower which create
storage loop and provide time for welding two coils.

After that sheets passes through non-oxidizing furnace and sheets are cleansed through
heat then sheets dipped into liquid of ZINK and a layer will coated on sheets. At the same
place a machine is used to remove extra layer of ZINK through Hot Air. Then it will
passes through High-Bay and the process of cooling of sheet has started by Water & Air.
This all is a continuous flow line and at the end of it two coil sheet remover has used to
make the coil roll of sheets.

Services - a valuable support network

The service departments like Traffic, Oxygen Plant, Water Management and Energy
Management provide invaluable support to this gigantic plant. Bokaro Steel has a vast
networked of railway tracks and over 40 diesel locos to smoothly run its operations. The
Oxygen Plant provides Oxygen, Nitrogen and Argon for processes like steelmaking and
annealing. Water Management looks after the huge water requirements of the plant and
the township, providing different grades of water and taking care of recycling needs.

44
Energy Management juggles the supply and demand of by-product gases and their
demand as process fuel.

Maintenance Departments

Bokaro has centralized maintenance departments for large-scale electrical and mechanical
maintenance, in addition to shop-based maintenance wings for running repairs and
maintenance. These facilities are capable of executing massive capital repairs, supported
by the fabrication facilities of the auxiliary shops.

Auxiliary Shops

To meet its needs for maintenance and repairs, Bokaro has a cluster of engineering shops
such as Machine Shop, Forge Shop, Structural Shop, Steel Foundry, Ingot Mould
Foundry, Cast Iron and Non-Ferrous Foundry, Electrical Repair Shop and Power
Facilities Repair Shop in addition to shop-specific Area Repair Shops. Most of the repairs
and maintenance requirements of the plant are met in-house.

The auxiliary shops and maintenance wings of Bokaro Steel, aided by in-house design
teams, have executed a number of highly sophisticated procurement-substitution,
productivity enhancement and quality improvement jobs, saving revenues and enhancing
equipment availability.

45
The expertise and operational scale of these departments, along with the service
departments, makes Bokaro a truly integrated plant, housing many virtual enterprises
within Bokaro Steel.

Scrap and Salvage Department

As the name signifies, the department works with Ferrous [Iron & steel] scrap to salvage
it & make it useful by adding value to it. SSD has a dual role to play in overall scheme of
things in the works division. Primarily it has to supply Iron and Steel scrap to Steel
Melting Shop (SMS) as a technological input in the Steel Melting process. Secondly, the
role of SSD is to collect all the Ferrous Scrap (waste for the place of origin) and bring it
to the department to transform it into a useful product. Every department of the plant
from Coke Oven to Cold Rolling Mill produce mental waste termed scrap. This may be in
the form of maintenance waste e.g. broken or worn out parts, damaged structure or
equipment or may be process arising. The prime products continue on their production
flow towards the final defined output, while the arising has to drop out as they are not
suitable chemically, mechanically or by size and shape. In the shape of fish tails or
irregular edge trimming or produce which are below the planned size. In a nut shell
SSD’s role is to ensure that all Iron and Steel Scrap (unwanted at place production) are
transported to site processed and transformed to usable shape, size and quality (free of
slag etc.) and transported SMS Magnetic Scrap Yards for using as coolant in the
converter bath. Surplus scrap after supplying the requirement of scrap is offered for
external sale to generate cash resources for the Company.

Function of the Department

Scrap is one of the essential raw material inputs of the steel making process, though it
does not play a direct role in the chemical reaction. Yet it has a vital role as a coolant in
the process and helps the steel maker control the converter bath temperature. This control
is essential for smooth operation of the converter. Other materials also act as coolants e.g.

46
Iron ore, Limestone, Lime Dolomite. They however have different effects on the process
in addition to cooling so adequate quantity of scrap is the best coolant. Hot metal
chemical composition and finished steel specification are some of the factors, which
determine the proportion of Iron and Steel Scrap to be used. In addition the density
determines whether it is light voluminous (of heavy compact) it is desirable light scrap
e.g. bales should be added first. This gives cushioning effects and protects the costly
converter refractory lining from damage. Apart from quantity, the quality of the scrap is
also important and a matter of concern for the steel maker. The scrap for charging into the
converter should be clean and free from non-metallic impurities like slag, Soil, Refractory
etc. Size and weight 1 to 2 Tones maximum. The steel maker expects clean, sized,
proportionate scrap in adequate quantity. It is the responsibility of SSD to ensure regular
and continuous supply of clean, sized scrap in adequate quantity and proper proportions
so that Steel Making can continue uninterruptedly.

Various Section and their brief activities

The scraps are received from all of the shops and after necessary inspection these are
diverted to respective processing units of Scrap and Salvage Department.
Processing of scrap includes Flame cutting, Bailing, Bursting and Breaking including
salvation of sticker ingots and slag cups. These processes of preparation of scrap are
carried out in different shops depending upon the type, size and shape of the scrap.

The processing of scrap comprise of the following units:

(a) Flame Cutting Shop No.1 and 2. And bailing press.
(b) Skull Breaker Shop No.1 and 2.
(c) Bursting Yard.

47
Brief description of Scrap processing Units:

(a) Flame Cutting and scrap Bailing unit, and Flame cutting Shop No.2

FCI shop is equipped with one Bailing Press and five overhead magnet cranes of
capacity 15 tones each. The shop stores Bailable material as well as manufactured bales.
It has space to process crap this lancing is at the eastern end of shop.
The bailing of scrap is done with all sorts of light scrap having thickness not more than 8
mm to get compact bales so as to charge these in L.D. Converter. This bundling section is
equipped with 1600 t balling press.

The materials used for bundling are shearing from HRCF/CRCFR, cut sheet from
HRM/CRM, fine from pit side of SMS, light metal structural like angles and channels and
other production and civil scrap having thickness up to 12 mm. In the shop there is
provision for magnet cranes of 15 t lifting capacity and 2 magnets grab cranes of 15+15T
capacity.
The capacity to Flame Cutting Shop No. 2 is 295,000T of scrap per year. The
preparation of scrap is done by the same methods as in flame Cutting Shop No. 1. The
hop is located in a one bay building of 30 meters width and 156 meters length. Two
through railway track is laid in the building for supplying and dispatch of the scrap there
is provision for 3 magnet cranes of 15T lifting capacity this shop is presently storing
materials ‘or external sale.

(b) Skull Braking Shop No. 1 and 2

Each skull breaker is designed for crushing of steel scrap and iron scrap. Skull breaker 1
is an open two storied crane gantry of 24 meters width and 96 meters length. The height
of the first storey of the gantry up to the head of the crane rail is 22 meters. The first
storey is common for the whole building and the second storey is erected at the end of the
section 48 meters long and is intended for crushing of the scrap of the skull breakers. All
along the columns of the building one railway tracks are laid for the supply and dispatch

48
of scrap shop is divided into two parts-one is the crushing pit and the other is storage area
with the capacity to store 7 days stock. Skull breaker 11 shops are also equipped with
balling (top) crane and bottom crane for handling materials. It is engaged for processing
of scrap for SMS.
The crane capacity of bally crane is 15 t and that of bottom crane 50T/75T in shop
1 and 11 respectively.
The skull breakers are meant for releasing mould and bottom stickers, releasing
slag cups from skulls and breaking heavy and medium skulls, ladle scrap, runner, scrap,
oversize and very often shapeless pieces of cast iron and steel scrap, rejected ingot
moulds, bottom plates, small mill rollers, machines ad machine stand and other cast
pieces. The size of the processed steel scrap should be 300 X 600 approx.
A steel ball of 10 t weight is lifted to a height of 20 To 22 meters with the help of a
crane and then released over the scrap for breaking it. The whole building is made of
hanging wooden sleeper so as to withstand the impact of splinters.

(c) Scrap Bursting Yard

The bursting Yard is provide with facilities for handling of 20,000 T scrap per year (2/3
steel scrap and 1/3 iron scrap). The unit is located upon one span crane gantry of 21
meters width and 41 meters length. One through track is provided for supply and dispatch
of scrap.
For scrap bursting the section is provided with reinforced pit lined with armored
plates. Bumming bursting the pit is covered with an armored cover. Blast holes in scrap
for loading of blasting charges are made by oxygen lancing. The unit is served by one
crane of 75/20T lifting capacity with a detachable magnet on the hook.
In this section releasing of stickers, and processing of rejected ingots, rolls, skull
and other heavy jams are done by means of explosives. Agencies engaged for processing,

49
dispatch of scrap. FSNL, govt. of India under taking of various type of iron and steel
scraps (external and internal).

TYPES OF PRODUCTS

In Bokaro Steel Plant, the finished products are categorized into three parts:

1. Prime Products: -
These are the actual products, which are originally produced for example, blooms, billets,
channels, rounds, angles etc.

2. By-Products: -
These products are not originally produced by Bokaro Steel Plant, but are outcomes while
producing the prime products.

3. Secondary Products: -
These are the defectives or rejected materials due to improper mixing of chemical
components or fail to meet the optimum requirements. Scraps generated inside plant are
also termed as Secondary products. The secondary products used here in after will mean
ferrous materials generated from various production units which can either suitably be
used for re-melting to produce iron and products or offered for sale if rendered surplus in
production process for example Defective Heavy blooms, Defective Rails, Rail cutting,
Rod cutting, Scrap etc.

50
Following Items fall under the category of Secondary Products:-

(A) REROLLABLE/IRON AND STEEL SCRAP/BFG SLAG

1. MS SLAB END CUTTING WITHOUT FISH TAIL
2. MS THICLE PLATE CUTTING (25-40 MM) MIXED W.FR.
3. SPILLED HOT METAL (10 MT AND BELOW) SMS ARISINGS.
4. LIQUID NITROGEN.
5. FINE IRON CHIPS FROM IMP (FE-70% APP).
6. FERROUS SIELPHATE – LOOSE.
7. BE GRNAULATED SLAJ (BOTH BY FIXED PRICE AND TENDER).
8. LIQUID ARGON.
9. PIG TRON.
10. TURNING & BORING.

(B) OTHERS
1. CARBIDE SLUDGE.
2. U/R AMC/MCB BRICKS.
3. U/R MAJ CHROME MAJ BRICKS.

(C) COAL CHEMICALS AND BY PRODUCT

1. MG BENZENE
2. NG TOLUENE
3. LS NAPTHA
4. SB OIL
5. HP NAPHTHALENE
6. ANTHRANCENE OIL
7. EXTRA HARD PITCH
8. HARD MEDIUM PITCH – SOLID STATE
9. HARD MEDIUM PITCH – LIQUID STATE
51
DETAILS OF SCRAP

There are various types of scrap, which is generated from the particular prime products.
Some brief summaries are given here: -

1. PCM SCRAP
This is a scrap generated in the pig-casting machine and consists of Splashing, PCM
runners and fires are in the fix range of up to 1.0 tones per piece.

2. BF RUNNER SCRAP
Generated in the blast furnace cast houses in the form of runner jams etc the maximum
fix per piece is up to 2 tones. This scrap contain amount of slag.

3. UNPROCESSED STEEL
Generated in the steel melting shops in slag cups and metal ladles.

4. SBIM SCRAP
This consists of semi broken ingot mould and bottom part as scrap and is in fix range up
to 2 tones per piece.

5. COBBLED SCRAP
The cobbled scrap arises from wire rod mill and includes some rejected coils and binding
wires also.

6. REJECTED ROLLS.
Cast iron rolls rejected steels rolls.

7. MILL CUTTINGNS

52
Rail and structural mill cuttings, merchant mill cuttings, rail cuttings, plate end sharing
rejected slabs, Slabs cuttings, miss rolled slabs, and wire rod cuttings are included in this
type of scrap.
COLLECTION OF SCRAP

1. All scraps identify the metallic scrap generated in the production, process and lying in
the shop. The shops collected the scrap with the help of overhead cranes and stock them
for loading into wagons.

2. Rejected rails and sleepers lying near the railways track inside the plant are collected at
such points from where loading and collection by truck is possible.

3. Crane facility is provided for loading the scrap into the truck whenever cutting or
processing not possible on the spot.

4. Scrap & Salvage department is responsible for overall coordination of scrap collection
from the entire plant. For this each shop nominate one executive for ensuring the
clearance of scrap from the shop.

5. Head of Marketing and customer service department requires the progress on scrap
collection on weekly basis.

6. Scrap & Salvage department makes suitable schedule for collection of scraps and
intimates the date of collection to respective shops.

NECESSITY OF SELLING THE ''SECONDARY PRODUCTS"

53
The net sales realization from all the Secondary products, By-Products and co-products of
BSL is around Rs.600 crores which is quite more than money the big industries. Out of
this Steel Scarp arising itself brings about Rs.15200 cores of money every year. Re-
production of main products from the; secondary products requires re-melting it again for
the required composition of the materials as per the desired specification.

By selling it to the different Mills/traders/Processors the plant earn around Rs.4000 per
tones of the direct profit than by re-producing it to the main product. The traders
/processors/re-rollers, use these as a raw materials for different finished products making
huge profits, the plant is also not losing anything.

Profit is the main aim of every business, and when the realization of these products for
the finished products proves to be costlier, the management plant decided to sell it to the
local market.

By selling secondary Products to the Local market new industries are developed for re-
rolling the Secondary materials to make finished products. It has also increased the small-
scale industries and employment opportunities.
Last year average price of scrap product were between Rs.12000/ton to Rs.16000/ton

Major customer of Secondary product

1. Ma Durga Ispat Udyog, Bokaro.

2. Bokaro Devlopement Area.
3. Kartike Ispat Pvt. Ltd, Kanpur.
4. Amit Steel Corporation, Howrah.
5. Diwan Steel, New Delhi.
6. Nenu Mal & sons, Kanpur.
7. Bhawani Metals, Bokaro.
8. Pandey Metals, Bokaro.
54
 9. Chinar Steel Segment, Bokaro.
10. Mangal Pvt. Ltd., Bokaro.
11. United Iro Coporation, Dhanbad
12. Bharat Supply Company, Kolkatta
13. Anup Steels, Delhi
14. Hanuman & rise Pvt. Ltd, BIADA
15. Amit Metcum Pvt. Ltd.
16. Steel India, Dhanbad
17. Kunal Steel Coperation, Ludhiana
18. GD Goel & Company, Kokatta
19. Modern Indua concast Ltd, Kolkatta
20. Agarwal Steel Centre, New Delhi
21. Tribhole Udyog, Dhanbad
22. Shiva Chemicals SSE, Sindri

Latest Price of different By-Product which BSL were sold in April

& May 09 with previous year price

Item 2007-2008 2008-2009 2009-2010

Hard Med Pitch Rs.16628 Rs.23331 ------
Ferrous Sulphate ------- ------- Rs.6000
Naphthalene Rs.47864 Rs.42793 Rs.42900
Anthracene oil Rs.13805 Rs.18511 Rs.13200
Benzene Rs.38354 Rs.30961 Rs.32900
Toluene Rs.39603 Rs.39080 Rs.35300
LS Naphtha Rs.32392 Rs.31029 Rs.31050
S Boil Rs.20533 Rs.19588 Rs.18000

55
Major Customer of By-Product
1. Shree Bhole Udyog, Bokaro
2. Jalan carbon & Chemical, Jamshedpur
3. Bajrang petro chemical, Kanpur
4. Shalimar Chemical industries Pvt. Ltd., West Bengal
5. Shiva Chemical, Bokaro
6. AGR Enterprise, Mumbai
7. Kutch Chemical Industries, Baroda
8. Bhilai Chemical Pvt. Ltd., Ranchi
9. Ganga Rasayan, West Bengal
10. Naresh Prasad Agarwal, Bokaro
11. Himadri Chemical & Industries, West Bengal
12. Eastern Tar Pvt. Ltd., Jamshedpur
13. Jalan Carbon, Jamshedpur

“ROLE OF MARKETING DEPARTMENT”

56
 MARKETING DEPARTMENT OF
BOKARO STEEL PLANT

Marketing Department is one of the Departments under Materials Management Division

of Bokaro Steel Plant. Marketing Department is entrusted with the responsibilities to sell
BSL’s Secondary Products, By-Products/Waste Products, and Idle Assets etc.
The Marketing Departments sales procedures are covered by the guidelines given by
SAIL Corporate office DELHI, and is given by CMMG (CORPORATE MATERIAL

57
MANAGEMENT GROUP), the objective of which is “To sell the materials in a fair and
transparent manner to achieve maximum possible revenue to the company”

(a) Marketing of prime products of SAIL’s plant including BSL is done by CMO (Central
Marketing Organization) which is a unit of SAIL.

(b) Marketing of secondary products and coal chemicals are done directly by Marketing
Department of BSL. As a matter of fact, the Secondary & By-Products are marketed by
the individual Plants only.

Marketing of these products are conducted by various sections by marketing department

of Bokaro Steel plants. It is engaged, with marketing of Primary Products for home sale
or export through CMO. The 4.0 Million tones section known as plate mill section
dealing with plates. Now this section has got ISO - 9002 certificate.

The secondary section deals with the secondary Products, it includes scraps of iron and
steel slag, coal and coke fractions, coal chemicals.
The Marketing development section deals with the MIS and strategic Planning activity
come under this section.

The Export section deals with the activities of the exports in respect of Iron and Steel
items produced by Bokaro steel plant.

ORGANISTATION CHART OF MARKETING DEPARTMENT

(BSL)

GM (Marketing)

Jr. Mgr. (Co-ordn.)/Mktg.

58
Cord, HK, Admn. & Est. Training
Officer
 DGM (Mktg.)
Audit, Vigilance, RTI, & other queries reply,
Contract Cell(MM), Sec. Sales

AGM(Mktg.)
Sec. Steel Ad & Est, QC, ISO, DCA,
Contract Cell(MM)

Sr. Mgr.(Mktg.)
Sr. Mgr. (Mktg.)
Slag, Waste, Iron,
Idle Assets, U&S, Surplus
Smug.
Scheme

Sr. Mgr. (Mktg.) Manager (Mktg.)

Coal& Chem., Zinc Dross, Jr. Mgr. (Mktg.)
Reports, Price
Ammonium Sulphate & Secondary Steel, Jr. Mgr. (Mktg.)
Monitoring, MIS
Ferrous Sulphate Safety Officer

FUNCTION OF MARKETING DEPARTMENT

1. To monitor the orders issued by CMO, So that these orders can fulfilled in time.
2. Put pressure on CMO, to get orders for an underutilized mill.
3. To sell all the secondary products directly i.e. directly by BSL and by CMO.
4. On day to day basis it takes care of the dispatches i.e. daily dispatch are checked.

POLICIES OF MARKETING

59
 Marketing Planning has responsible function in the working of marketing department. All
the risky developments, taking out solution to cripple `situations, this section carries out
product pricing and related activities, some of the programmes, policies and procedures
are as follows:-

I) Positioning the product a value based place in customer mind.

II) Finalize annual sales plan and quantity, monthly, weekly, and daily rolling
programme of Rolling mills in consultation with CMO and mills. This plan is based
on the sales forecast receive from JPU SPL/ Iron and steel controller.
III) Optimizing the product-mix by proper utilization of available stocks.
IV) Receiving Enquiries and complaints, cancellation of orders etc.
V) Coordinating the works of mills and traffic department so as to maximize
dispatches.
VI) Co-ordinations with CMO from stages of enquiry, for exports, development of new
Profiles, sections, modification of product scheduling till the orders are completed.
VII) Development of new qualities of steel.
VIII) Periodical market surveys of products to analyze the market position.
IX) Implementation of suggestions received from the customers’ feedback.
X) Ensure customer satisfaction by meeting customers regularly; provide redress to
their problems and fulfillment of demand.

Pricing policy and Sales Procedure:

PRICING:
Fixing the price of a product is the most vital function in the whole process of the
marketing and it should be done after proper market study and requires decision making
ability. If price is too low the company will lose revenue and if the price is too high it will
lose customers resulting in loss of revenue valuable customers. Coal chemicals are the
main product which is to be marketed by the Marketing Department of Bokaro Steel
Plant. Almost all the products are sold on the fixed price basis. This is due to the fact that

60
the company does not enjoy monopoly in the said market and the price is totally market
driven.

The policy adopted by the marketing department for pricing of materials is largely guided
by the price offered by the bidders during the auction. The various factors taken into
consideration while pricing the re-rollable items can be enumerated as follows: -
(a) Prices offered in the auction sales.
(b) Quantity of material to be lifted.
(c) Managing director's approval.

The average of the prices offered by the bidder during auction is taken as the basis to fix
the prices of materials to be sold through marketing department. Further the techniques of
break-up-pricing are adopted i.e. the larger the quantity purchased lower will be the
prices. This technique encourages the buyers to purchase larger quantity. Finally the
managing director approves the prices set by the pricing committee. On this basis, a price
list is prepared for all the potential buyers. Price list also indicates the sales tax and
Excise duty to be levied. Thus the interested parties place their orders with the marketing
department on the basis of price list reviewed every month. Every customer is required to
have a security deposit amount of Rs.1 lakh. The payment for the material required is to
be in advance. The material is supposed to be lifted on the specified date on account of
delay the party has to pay the difference in the prices, if there is any increase in
subsequent month.
Standing Pricing Committee:
The committee reviews the price of various products and takes decision in favor of
maximizing the profit. It holds meeting at least once in a month. But the volatility of the
market and pool of different products lead to a number of meeting of the committee in
quick succession.

The committee consists of:

 GM (Utility), Chairman
 GM (Marketing), Convener

61
  DGM (Finance), member
 DGM (Sales Coordination), member
 DGM (Stores), member
 DGM (BPP), member

For Scrap goods the DGM (SSD) replaces the DGM (BPP). Rests of all the members are
always present in all the meetings.

While deciding the price following points are kept in mind:

 Dispatch of the last month.
 Material in stock.
 Forecast of next month.
 General market condition.
 Availability of transport facility.

GM (Marketing), as per the need, decides the frequency and time of meetings to be held.
Minute report of all the meetings is prepared and it contains the existing price and the
proposed price. The final price is moved to the MD through the official channel including
GM (Marketing), Executive Director (MM), GM (Finance and Accounts), and ED
(Works). After the MD’s approval the price becomes applicable and the circular
indicating the revised price is printed, issued and distribution to the customers and all the
concerned departments.
DISTRIBUTION
For the purpose of distribution of steel (as per JPC) policy in fashion, customers are
categorized into A, B, C & D. Priority sector customer e.g. Defense, Railways etc. are
under category A and about 60% of the product allotted to them. The balance 40% is kept
for the category B, C & D.
On the other hand for sale of scraps there is no such policy adopted by Bokaro Steel
Plant. Customers are served on first come first served basis.

62
CHANNELS
Bokaro steel plant has zero level channels as it directly sells to the customers. There is no
intermediate among producer and consumer. Marketing Department always remains in
contact with the customers’ extracts information about the current market situation on the
basis of interaction between them.

SALES PROMOTION
Sales Promotion consists of a diverse collection of incentive tools designed to stimulate
quicker or greater purchase of particular product. As a part of promotional activities, BSL
is employing following activities:
a) Discount slabs is provided to boost the sales, description of which is given below:
• Up to 10,000 tones ----- No Discount
• 10,000 to 15,000 ----- 15% Discount
• Above 15,000 ----- 20% Discount
b) To find new customers and to inform customers at far distant areas Tender Notice
given in the newspaper for sale of scraps. Best among the application is accepted
with a view to get the best revenue.
c) Sometimes when new item is to be sold sales notice is given in the newspaper.
But most of the time local customers get informed from other customers.

MARKETING STRATEGIES OF BSL

Steel being an industrial commodity it is very necessary to maintain customer relationship

for profitability and smooth running of company.

1. Customer Satisfaction
BSL adopts following practices for customer satisfaction.

63
a. Procedure / process adapted to access current / future expectation of customers.
b. It induces market research visiting customer premises attending to customer
complaints.
c. CMO has Market Management Group where specialists monitor changing demand
pattern and development in each Market segment is carried on.
d. It has posted market development officers at various locations that are its eyes and ears
for monitoring current and future expectation of its customer.
e. The Business-planning department is exclusively meant to study customer's changing
demand scenario and assess current and future expectation.
f. To understand customer needs seminars and workshops are also organized by BSL.

Building Customer Relationship

BSL has adopted the philosophy of recognizing segment of the market and identifying
key customer in segment and giving them preferential treatment. CMO sales executives
have been trained to use direct selling as tool for building long lasting relationship with
the customers. Easy access to customers to seek assistance makes proposals send
comments and compliments.

MARKET DEVELOPMENT
BSL has valued customers group in identifying their specific needs Specific to that group
thus segmenting and developing market segment for our products. Major product
modifications are done as per their specific needs of the Market segment thereby creating
product differentiation packages.

PRODUCTION ACCORDING TO MARKET NEEDS

BSL is always in touch in market and try to produce according to market needs. BSL tries
to produce quality products / new products which fulfill the need of market.

64
2. STOCK REDUCTION
Giving facilities like door delivery, road dispatches, credits facility and rounds the clock
stockyard operation.

3 PRICE FIXATION
Pricing is done basically by the CMO. Taking into consideration cost of production,
government steps on pricing, certain percentage of profit, price of raw material fright
charges etc. i.e. pricing is COST PLUS PRICING.
4 DESPATICH
As the product is manufactured, this department directs the stockyards the mode of
transport to the destination with reference to dispatch program and dispatch advice is
mode.

5 DOCUMENTATION
With the dispatch of product the Finance department calculates the total cost of product
as per demand order. Certain receipts and bills quoting the material code, nature,
quantity, and all expenses are sent to connected stockyard. The product will be then
released to the concerned person after proper and complete payment to the pay-in-
authorities is made.

MARKETING OF SECONDARY PRODUCTS

During the seventies and sixties when the plant was one million-tones and2.5 million-
tonnes capacity respectively, arising of secondary products was limited and such arising
was recycled for re-melting. Therefore there was no scope for marketing in other words it
was not economical. The plant capacity has been increased from 2.5 million tons to 4
million tones in the late sixties. New technology has been adopted while increasing the

65
capacity of the plant where by the use of arising for re-melting drastically reduced. This
has given more impact to the making of secondary product.

In the nineties we have seen lot of changes in the economic scenario of the country. The
concept of more employment in Public Sector Enterprises has changed to more profits.
There by the plant also has geared up its strategy towards this end. One of the strategies
adopted by the plant for increasing the profit is marketing of secondary products.

In the recent years a number of foundries and re-rolling Mills come into existence
throughout the country. These small scales Sector need the "Secondary products" as input
raw material for their production. The company has engaged in educating them the use of
secondary products for different kinds of end products for consumption of general public.
The plant extends all types of facilities and assistance to these small-scale units. This, in
turn gives scope for more employment opportunities.

The plant for marketing has adopted following strategy:

1. Committed delivery.
2. Competitive price
3. Quick complaint settlement.
4. Culture of customer service.

It is necessary to mentioned here that the companies' profit consists of 10% turnover of
secondary products for the Last two years.
PLANNING FOR SALE OF SECONDARY PRODUCT

1. Marketing Recovery Department (MRD) works out the quantum of different types of
scrap available for sale on monthly basis. This is determined by ascertaining the total
scrap stock at the beginning of the month. Scrap arising during consumption. The
remaining quantity is considered for sale. A, monthly report on availability of scrap is
prepared by MRD and sent to marketing department.

66
2. Marketing Department finalizes the plan for actual quantity of scrap to be sold in
consultation with MRD. Marketing department finalizes mode of sale, terms and
conditions for sale, locations and commercial aspects.

3. The pricing committee consist of Managing Directors fixes the price of each type of
scrap.

4. Marketing department obtains MD's approval on price fixed by pricing committee.

PROCEDURE APPLIED FOR SALE OF SECONDARY PRODUCTS

1. After obtaining approval of quantity and price for sale, Marketing department
scrutinizes the demand from various parties, examine the Priorities and issue "offer
letters" to respective parties. The terms and conditions for sale are also enclosed with the
"offers Letter"

2. About one third of the quantity of material to be sold during the year is offered to the
actual users, subject to registration of demand.

3. For the balance quantity to be sold at prices fixed by pricing committee, preference is
given to actual users over traders. If there are no actual users, the material may be offered
to traders giving preference to registered traders over others.

67
 4. First preference is given to the actual users for allotment of scrap against particular
category of users. Scrap processing units are given second preference for such
allotments.

5. The amount received from the party towards advance payment and security deposit is
forwarded to finance department by marketing department after recording the details in
the register.

6. Parties are allowed to visit the respective location disposals site, and inspect the scrap
offered for sale.

7. Marketing department prepares sale order for the parties who have accepted the offer.
Sale orders are issued party wise and category wise i.e. individual sale order covers such
categories like C I scrap, steel scrap, re-rollable, slag and waste products.

8. Based on the deposit made by the party, finance department intimates to marketing
department about release of requisite scrap for supply.

THE STRUCTURE OF THE PROCESS OF SALES AND

MARKETING

PRODUCTS

PRIMARY (SPECIFIC PARAMETER) SECONDARY/BY-PRODUCTS

68
 CMO (KOLKATA) UNITS- BSL, BSS, RSP, DSP etc

BSL MARKETING

METHOD OF SELLING

E-AUCTION SALE TENDER FIXED PRICE SALE

BSL MARKETING (MAIN

SECTION)

CHEMICAL & SLAGS & WASTE

STEEL IDLE ASSETS PRICING
BYE-PRODUCTS PRODUCTS

DEMAND REGISTRATION OF BSL

Marketing department of BSL sales homogeneous steel scrap at fixed price. For this
purpose the procedure for registration of demand and offers is as below:

1. Preference for sale of material given to local parties and those, which are actual
customer. Material is not sold for trade.

69
2. Sale of material made to re-rolling mills and scrap processing units and the lots of sale
between them maintained at 67:33.
3. Based on the above consideration “offer letter” issued to the party offering a quantity,
which has been lifted by them during the last preceding year or allocated by the state
industries, Department. In the offer letter party is advised to complete commercial
formalities e.g. submission of “Die Registration Certificate “etc.

70
Selling of Secondary & By-Product

This involves a direct marketing process. The management of BSL in consultation with
the official of the market development and customer service department work as group
for the sale of these items. Different modes of selling are used for these products

71
 MODE OF SALE

Fixed
E-auction Price
Sale

Inter
Plant Tender
Transfer

72
 Procedure of E-Auction

Advertisement/posting of dates and types of materials to be auctioned in SAIL website

and various news papers (Local & National) every 15th to 20th of the month for the next
month,

1. Posting of details of lots to be auctioned one week prior to the date of auction, on
the website of SAIL and metal Junction.com

73
 2. Inspection of lots to be auctioned by customers.

3. Auction is held on www. Metal Junction.com

4. Report of auction conducted is give by Metal Junction.com

5. Meeting of reserve price opening committee and their recommendation.

6. Approval for sale of lots recommended by RP opening committee.

7. Issue of offer to the customers, based on approval of chief Executives.

In this method the defective materials from all the mills is arranged in heaps of 100-150
tones to be sold by auction. Generally auction sale takes place ones in a month.
Representative from all the re-rolling mills turn up during auction and they bid for the
available material. The raw material need of this mill is being made by the plant and the
availability of the re-rollables has increased the re-rolling mill to develop very fast. The
plant extends all types of facilities and assistance to these small scale units, which to turn
give scope for more employment, and then the material is lifted on the terms and
conditions as mentioned in the tenders.

FLOW CHART OF E-AUCTION

Advertisement of dates/type
of materials on SAIL
website/Newspaper

Posting of lot details to be

auctioned on SAIL /
MetalJunction 74 website
 Inspection of lots by
customers

Auction conducted on
metaljunction.com

Report of Auction by
metaljunction.com

Reserve Price Opening

Committee meeting

Recommendations
Approval for Sale

Issue of Offer Letter

DEFINITION OF KEY TERMS

Auction.

75
 Auction refers to a forum where the requirement for one/more lots of an item is
stated and the participants (bidders) are required to bid down the price to be selected to
supply the requirement.

Online Auctions.

Online auctions refer to those auctions conducted through the Internet with the
bidders (from one or more locations) simultaneously bidding to be selected for supplying
the item/s on auction. In other words, the venue for the auction is on an Internet website/
platform. The "Service Provider's" website assigned by "Service Provider" would
constitute venue for the purpose of the online auction.

Award at the Auction.

In a single winner format, only one bidder (normally the bidder who quotes the
highest price) is awarded all the units of the item being auctioned. The bidder quoting the
highest price is normally allotted the item.

Client.

Client is the individual/business entity who has contracted "Service Provider" to

conduct such auction. In case of auction, the purpose would be the genuine intent to sell
the selected items/Lot to the bidders desiring to buy these items from the Client.

Bidder.

Bidder is the individual/business entity participating in the auction, intending to

buy the items/Lots from the Client. To be become a Bidder in the auction, a business

76
entity has to secure client approval for participation and also provide written assent to the
General Rules and Regulations

Auction Engine.

Auction Engine refers to the software that encapsulates the entire auction
environment, processing logic and information flows. "Service Provider" is the sole
owner of the auction engine and retains exclusive right over the utilization of the same.

Timings of the Online Bid.

All the timings of the Online Bid shall be based on the time indicated by the Server
hosting the Auction Engine. It shall be the endeavor of "Service Provider" to ensure that
the Server Time reflects as closely as possible the Indian Standard Time (IST) i.e. GMT +
0530 hrs. However, in the event of any deviations between the Server Time and the
Indian Standard Time, the functioning of the Auction Engine
(Launch, operation, and closure) would be guided by the Server Time. Bidders are
advised to refresh both the windows of the Auction Module check the exact Server Time
(displayed in both the windows).

Preview Time.

Preview Time refers to the period of time that is provided prior to the commencement
of bidding. This is to facilitate approved participants to view the auction details such as

77
item specifications, bidding details and bidding rules. The purpose is also to familiarize
participants with the functionality and screens of the auction mechanism. It is not
mandatory for "Service Provider" to provide Preview Time.

Start Time.

Start time refers to the time of commencement of the conduct of the online auction. It
signals the commencement of the Price Discovery process through competitive bidding.

Duration of the Auction.

It refers to the length of time the price discovery process is allowed to continue by
accepting bids from competing bidders. The duration of the auction would normally be
for a pre-specified period of time. However, the bidding rules may state the conditions
when the pre-specified duration may be curtailed/ extended. The conditions include:

Shortening of auction duration in the event of no bids for a specified period of time
(Inactivity Time)
Automatic extension in the event of bids being entered towards the end of the scheduled
duration to facilitate the other bidders to view and react to the bid.

Auto Extension of the Auction Timings.

In the event of bids in the last few minutes of the scheduled bid time, the Bid Timings are
automatically extended for a specified period from each such bid. Such Auto Extension
shall continue until no bids are placed for the specified period (Engine remains inactive
for the specified period). The Inactivity Time for Auto Extension purpose is normally X

78
minutes. "Service Provider" however retains the right to change the same. The Inactivity
Time applicable for the particular Online Bid shall be visible to the bidders under the
Bidding Rules module on the engine.

End of the Auction.

End of the Auction refers to the termination of the auction proceedings signaling an end
to the price discovery process.

79
 PROCEDURE OF SALE THROUGH FIXED PRICE

1. General Sale notice for different items to be sold is posted on SAIL website and
advertise in various newspapers (Local and National) between every 15th to 20th of
the month for the next month,

80
2. For requisition of materials, applications are invited from customers bet 25 th
-30th/31st of every month.

3. Allocation of material to various customers is done as per approved procedure of

priority allocation.

4. Offer letters are issued to the customers.

5. Price applicable will be the price rising at the time of dispatch.

FLOW CHART OF FIXED PRICE

Advertisement of type of
materials on SAIL
website/Newspaper
81
 Application from customers

Allocation of material

Issue of offer letter

PRIORITY IN BOOKING OF MATERIALS BY MARKETING

DEPTT

Category Priority Buyer Quantity to be

82
 allotted
st
A 1 Govt. Units/PSUs & its Any quantity
subsidiaries & joint ventures required by them
of govt. units having more than
50% govt. share

B 2nd Dependent BIADA units with Maximum 70% of

MD/BIADA’S the balance
recommendations & available quantity
MD/BSL’s approval. after meeting the 1st
priority

C 3rd Consumers/Processes of 30% of balance

Jharkhand state

D 4th To all other customers Out of the balance

quantity of material
left if any

83
 TENDER DOCUMENT

TERMS & CONDITIONS

84
1) The parties desirous of purchasing the material have to quote for entire quantity of the
material.

2) The Tenderers are advised to inspect the material at B.F. Slag Dump, if so desired,
before submitting the quotations.
Parties will be permitted to see the materials from 9.30 Hrs to 4.30 Hrs daily on working
days. Necessary entry passes may be obtained from the Receptionist/ CISF

3) Terms of sale: On “As is where is basis ", " No complaint basis “and” Ex-works basis"
No PICK and CHOOSE shall be allowed other than sorting out Iron/Steel pieces found, if
any.

4) The conditional quotations are liable to be rejected.

5) EARNEST MONEY

EMD (Earnest Money Deposit) Rs.100000/- for the item to be deposited in the form of
DD/BC/PAY ORDER in favors of SAIL/Bokaro Steel Plant, payable at Bokaro, from any
Nationalized / Scheduled banks along with the quotations. Any variation / demand in
such taxes, duties, levies, and charges and / or any fresh imposition of such taxes, duties,
levies and charges shall also be to the account of the bidder to whom the tender is
awarded.
The tenders should quote their rate in per cubic meter against the total quantity as asked
for in the tender document both in words and figures.
In case of any mismatch / ambiguity between the two the higher of the two rates only
shall be considered.
The tender should be submitted in the TENDER BOX placed inside the CONFERENCE
HALL OF MARKETING AND STRATEGIC PLANNING DEPARTMENT on the 5th
floor of ISPAT BHAWAN. The general terms and conditions of lifting by road and safety
stipulations in force shall be applicable.

85
6) PAYMENT TERMS:

The successful bidder has to make payment for the quoted quantity in 12 (twelve) equal
installments of 1000 CU. each. 1st installment is to be deposited within 10 (Ten) days
from date of issue of sale order inclusive of the date of issue of sale order. Subsequent
installments are to be deposited within 30 (Thirty), 50 (Fifty), 70 (Seventy), 90 (Ninety),
110 (One hundred ten), 130 (One hundred thirty), 150 (One hundred fifty), 170 (One
Hundred seventy), 190 (One hundred Ninety), 210 (Two Hundred ten) & 230 (Two
Hundred Thirty) days from the date of issue of sale order (inclusive of the date of issue of
sale order). However, lifting of entire quantity of material has to be completed within the
validity period of 300 (Three Hundred) days from the date of issue of sale order
(inclusive of the date of issue of sale order). Payments shall be in the form of DD/BC/Pay
order or acknowledgement note from SBI, IFB commercial, Branch of Raipur /Bokaro
payable at Bokaro from any of the Nationalized / Scheduled banks in favor of SAIL
/Bokaro Steel Plant. In case of failure of payment as mentioned above and or failure in
lifting of material within the validity period of lifting, the Management reserves the right
to cancel the sale Order and forfeit the security deposit.

7) LOADING AND TRANSPORTATION:

Loading and transportation of the material in the tenderer vehicle has also to be done by
the tenderer at their own cost and arrangements.
Successful customer will be allowed to lift the material only 4 days in a week.

8) Bokaro Steel Plant reserves the right to accept or reject any of the tenders or all the
tenders or award contract to any other customer fully or partially without assigning any
reason.

9) The management reserves the rights to divide the quantity offered for sale and allot the
material to more than one tenderer.

86
10) VALIDITY OF LIFTING:

The successful tenders have to complete the lifting of the allocated quantity of material
within 300 (Three hundred) days from the date of issue of sale order.

11) The offer of the customer would remain valid for a period of 90 (Ninety) days from
the date of opening.

12) Loading will be done under the supervision of MRD, the operating agency of the
contract.

13) Evaluation criteria are the highest price for whole quantity (12000 Cu.) subject to the
price being acceptable to the management of Bokaro Steel Plant.

14) The standard Arbitration Clause of BSL as per the Arbitration and Conciliation act
1996 would be applicable.

SALES OF SECONDARY STEEL (Value in Lacks)

87
 PERIOD 2007-08
1st Qtr 11464
2nd Qtr 13179
3rd Qtr 13425
4th Qtr 15194

SALES OF IRON & SCRAP (Value in Lacks)

88
PERIOD 2007-08 2008-09
1st Qtr 958 1326

2nd Qtr 1115 1039

3rd Qtr 1014 1103

4th Qtr 1472 915

SALES BFG SLAG (Value in Lacks)

89
PERIOD 2007-08 2008-09

1st Qtr 797 840

2nd Qtr 933 914

3rd Qtr 953 882

4th Qtr 940 998

SALES PIG IRON (Value in Lacks)

90
PERIOD 2007-08 2008-09

1st Qtr 1436 0

2nd Qtr 854 458

3rd Qtr 0 175

4th Qtr 0 603

SALES BY-PRODUCTS (Value in Lacks)

91
PERIOD 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
ST
1 Qtr 904 1218 1041 1263 1759 2906
ND
2 Qtr 1320 1731 1417 1458 2047 2797
RD
3 Qtr 1145 1038 1312 1295 2104 2041
4TH Qtr 2024 1797 2045 2115 1918 1701
TOTAL 5393 5784 5815 6131 7828 9445

SALES MISC OTHERS (Value in Lacks)

92
PERIOD 2007-08 2008-09
1st Qtr 961 1457
2nd Qtr 848 1515
3rd Qtr 987 1065
4th Qtr 1182 462

E-AUCTION (Value in Lacks)

93
 PERIOD 2007-08 2008-09
1st Qtr 8144 13410
2nd Qtr 12100 10800
3rd Qtr 9146 11223
4th Qtr 12619 6553

PRODUCTION PERFORMANCE OF BSL

94
 07-08 08-09(MARCH)
TARGET ACTUAL TARGET ACTUAL

HOT METAL 4585 4660 5050 4020

CRUDE STEEL 4360 4130 4700 3577
SALEABLE 3655 3600 4210 6479
CR-COIL

SALAEBLE STEEL 3780 3900 4110 3383

PROFIT IN BSL
YEAR PROFIT (Rs. IN CRORE)
2005-06 2056
2006-07 2737
2007-08 2830
2008-09 1324

SWOT ANALYSIS

STRENGTH-:

1. Bokaro Steel Plant has a huge pool of skilled and experienced personnel.
2. Principle of hierarchy is given due respect in BSP enabling management to
ensure proper planning and its implementation.
3. Flawless corporate image of SAIL enhances the confidence of managers and
customers alike.
4. Record of harmonious customer relation boosts the revenue graph towards north.
95
 5. Strategic Information System in the organization gives cutting edge advantage
reducing cost and time for every operation.
6. Huge infrastructure, when provides a strong base for better production and
marketing, since it has countrywide network of stockyards, dockyard and sales
branch offices.
7. The by-product of Bokaro Steel Plant is coal-based and of best quality against the
petroleum based bye-products, giving the company a huge advantage against their
competitors.
8. Bokaro Steel Plant has TQP i.e. Total Quality People which mean a dedicated
work force towards serving the company’s customers.
9. A strong R&D cell of the company keeps on working over enriching the quality
of its bye-products and to reduce the cost of the whole process.

WEAKNESS:-

1. Lack of teamwork and internal customer orientation inhibits proper

implementation of company’s policy.
2. Complex pre post sale activities repel the probable customers.
3. Due to its large organizational structure involving numerous policies and
officials, prompt decision making is a real problem.
4. The hard working marketing officials are not given due recognition and
appropriate reward that hurts their motivation and interest.

96
OPPORTUNITY:-

1. There is growing demand for secondary and by-products in both domestic and
international market.
2. State government is planning to establish small industries in and around Bokaro
which will increase the list of probable customers.
3. New markets are to be searched and developed with the opening of the global
steel market.
4. There is a great opportunity in the field of research to improve the quality of the
coal-based products which would strengthen its well established base among
customers.

THREAT:-

1. The biggest threat for any company is competition, SAIL, BSL is also no
exceptional. So due to globalization the company is facing stiff competition from
global companies in all product segments as well as facing competition from
domestic players.

FINDINGS

RELATED TO MARKETING DEPARTMENT

During our eight weeks training in marketing department of BSL. We have observed
certain problems in it these problems are findings of our studies.

1. All marketing procedure of prime products are decided by SAIL and carried out by the
Central Marketing Organization (CMO).

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2. As the organization is concerned with a large number of productions activities and the
departmental work are done mostly manually from placement of orders to documentation,
which ultimately frustrates the employees.
3. The organization is more concerned with larger orders of steel products by ignoring
the smaller orders.
4. The local customers with business of by-products are sometimes made to wait for days
to get their papers cleared by the department.
5. Most of the existing yards suffers from improper stocking space and siding facility
often they are not well developed due to this the material stored there are rusted and other
defects are caused and later they are disposed of by offering some concession or at low
rate which result in loss.
6. Due to improper packing, the materials reach the stockyard often in damaged
condition, which is attracting criticism from the customers and these damaged materials
are sold with loss.
7. Export considered Secondary to domestic selling as BSL is a govt. Undertaking and its
First priority is given to domestic marketing.

RELATED TO SECONDARY SECTION

1. Payment is accepted from the customers even when the material is not available in
stock, in anticipation that the material will be made available shortly in the stockyard.

2. Unavailability of material in the stockyard leads to holding up of the huge investment

of the customers i.e. material cannot be purchased from the alternative source.

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 3. Refund of excess payment takes long time sometimes more than a year.

4. Price list made available to the re-rollers every month contains even the price of
materials, which is not available.

5. The price prevailing in the market of the finished goods manufactured by the re-rollers
are sometimes less as compared to the material purchased from BSL which results in
heavy losses.

SUGGESTIONS & RECOMMENDATIONS:

1. E-payment should be implemented for complete automation of the e-auction

process.
2. E-invoicing should be adopted for saving money by replacing paper based
processes.

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3. Concept of Key Account Manager should be adopted for better customer
satisfaction of regular customers.
4. Extensive customer contact.
5. The pricing as we well as the distribution policies should be framed by keeping in
mind the requirements of the complete range of manufactures and not only the bulk
consumers. This will encourage the new re-rolling mills to approach BSL for the
material.
6. Price of the material for which 100% payment has been received as advance should
not be changed if the delay in the lifting of the material by the party is due to some
fault of BSL but if is due to deliberate delay in lifting the material by the
customer than the same policy should be applicable.

7. When the customer having rolling mill of a smaller size purchase material, which
are rolled in a bigger rolling mills than this, clearly indicates that the material is
being purchase for trading. This practice can be prevented if BSL obtains a copy of
certificates issued to the owner of every mill by the District industry center
specifying the size of the mill.

8. BSL can appoint 2-3 authorized stockiest also to avoid trading practice. In this way
the benefit of break up pricing can be passed on to the one for whom these have
been framed i.e. the actual re-rollers.

9. Price list made available to the various re-rollers every month by BSL should count
all the items but it should clearly indicate the material which is not available so that
the customers requiring that particular material can approach some other source.

10. The infrastructure facilities at the disposal yard should be maintained properly and
needs improvements so that the pace of the lifting process is increased.

11. Fully equipped computers system in marketing department.

12. Proper packing is to be done to safeguard the materials from damage, which is
occurring due to multistage handling and transportation.

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13. Refund of excess payment process should be improved and simplified. It. should
make payment in less time. Ensure delivery of the material for which the payment
is accepted so that mills are not closed or shut down for want of material.

14. Alternatively if the material is not available the BSL authorities should not accept
the payment so that the buyer can approach some other source for procuring the
material and should not unnecessarily wait for the material, which is not available.

CONCLUSION

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1. BSL marketing network is spread all over India, which helps in collecting, orders of
various customers easily and it can easily interact with its customers.

2. BSL officers posted outside like Kolkata, Delhi, Chennai and Mumbai who work in close
coordination with the Marketing Department.

3. Sales of Secondary Product have reduced compared to previous year.

4. Sales of Iron & Scrap are also reduced compare to previous year.

5. Sales of Blast Furnace Slag are almost same as last year.

6. Sales of Pig Iron are less in this financial year. Last year sales of Pig Iron was nil in the
3rd and 4th qtr but in this year it has shown good market which is good sign.

7. Market of By-Product shown good sign in this financial year and sales of By-Product has
increased compare to previous year. The price of By-Product has reduced in this financial year.

8. BSL has fail to achieve the target which they set for them and unable to meet production
of Hot Metal, Crude Steel, Saleable CR coils and Saleable Steel of the target, its result has seen on
the profit of the company which reduced by 50% compare to last financial year.

ABBREVIATION

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1. SAIL - Steel Authority of India Limited.
2. TISCO - TATA Iron and Steel Company.
3. MECON - Metrological & Engineering consultants’ ltd.
4. HSCL - Hindustan steel works consultants Ltd.
5. NMDC - National Mining Development Corporation ltd.
6. RDCIS - Research and Development Centre for Iron and Steel.
7. CET - Centre of Engineering and Technology.
8. CPTI - Central Power Training Institute.
9. MRD - Marketing Recovery Department.
10. BFGS - Blast Furnace Granulated Slag.

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 BIBIOLOGRAPHY

• Magazine published by SAIL

• Training Manual
• Government Publications
• Books of organization
• Company’s Website
www.sail.co.in
www.metaljunction.com

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