PRESENTED BY
NITISH KUMAR SINGH

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A STUDY ON THE PRICING AND SALES STRATEGY OF SECONDARY AND BY-PRODUCTS AT SAIL (BOKARO)
1.Executive Summary
This study investigates “the Pricing and Sales strategy of Secondary and by-products at Bokaro Steel Plant”. This study is done for SAIL; BSL
The present study was undertaken to see the mode of sale and pricing methods of Secondary Product of SAIL. Marketing Department is the newest genesis from the SAIL and attempts to reach their where no corporate has ever ventured so far.
The survey was conducted in Marketing Department and Sales Coordination department. I was to find how auctions, fixed price and tenders are used for marketing purpose BSL.
Various steps involved are as follows. To know about the e-auctions of marketing department. How they use this technique and 90% marketing and selling is done through auction and rest will be 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 a challenging work to study and observe "pricing and sales strategy of secondary and by-products in BSL", which is a unit of SAIL.
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 have a clear understanding of what customer satisfaction means if the plant aim to achieve leadership in customer satisfaction. While improved customer satisfaction is necessary for ensuring prosperity of the company 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.
The basic objective behind the study carried out by me is to study the major contribution of Secondary product to total sales, which is pre-determining for the success of the company. By selling the Secondary product in local market company is earning profits. It is also creating an employment in small scale industries and developing the economy.
CHAPTER 2
INDUSTRY PROFILE
India is the eighth largest producer of crude steel in the world, accounting for 3.37% of the global steel production in 2005. India’s finished carbon steel production grew to reach an estimated 42.63mmt in 2005-06; primary producers alone contributed about 38% whereas secondary producers contributed the rest. With reference in changes in economy Indian steel industry is poised for massive expansion. Dramatic consumption growth over the last few years has stimulated enormous expansion plans, facilitated by a relatively unexploited iron ore raw material base. India is now being hailed as the new China, where crude steel production soared from less than 100m tonnes in 1995 to over 400m tonnes in 2006.This report focuses on detailed study about the Indian Steel Industry. Steel became an integral part of development. It discusses basic steel manufacturing processes like Blast Furnace and, Electric arc Furnace, industry value chain with a special reference to major raw material trends and price trends of steel products. Demand –supply dynamics has been discussed along with key growth drivers and Export-Import scenario. It also talks about Issues & challenges of the steel industry, mergers and acquisitions, government policies and regulations. Top 10 Leading Players in steel Industry have been profiled namely Steel Authority of India (SAIL), Tata Steel, ESSAR Steel and JSW Steel in this report and analyzed on the basis of financial and operational performance and compares their Competitive Positioning along with future outlook in the light of increasing trend in investments in the domestic industry .Steel Industry in India is on an upswing because of the strong global and domestic demand. India's rapid economic growth and soaring demand by sectors like infrastructure, real estate and automobiles, at home and abroad, has put Indian steel industry on the global map. According to the latest report by International Iron and Steel Institute (IISI), India is the seventh largest steel producer in the world.
With reference to development which revised Indian infrastructure, the origin of the modern Indian steel industry can be traced back to 1953 when a contract for the construction of an integrated steelworks in Rourkela, Orissa was signed between the Indian government and the German companies Fried Krupp und Demag AG. The initial plan was an annual capacity of 500,000 tonnes, but this was subsequently raised to 1 million tonnes. The capacity of Rourkela Steel Plant (RSP), which belongs to the SAIL (Steel Authority of India Ltd.) group, is presently about 2 million tonnes. At a very early stage the former USSR and a British consortium also showed an interest in establishing a modern steel industry in India. This resulted in the Soviet-aided building of a steel mill with a capacity of 1 million tonnes in Bhilai and the British-backed construction in Durgapur of a foundry which also has a million tonne capacity. The Indian steel industry is organized in three categories i.e., main producers, other major producers and the secondary producers. The main producers and other major producers have integrated steel making facility with plant capacities over 0.5 mT and utilize iron ore and coal/gas for production of steel. The main producers are Tata Steel, SAIL, and RINL, while the other major producers are ESSAR, ISPAT and JVSL. The secondary sector is dispersed and consists of: (1) Backward linkage from about 120 sponge iron producers that use iron ore and non-coking coal, providing feedstock for steel producers; (2) Approximately 650 mini blast furnaces, electric arc furnaces, induction furnaces and energy optimizing furnaces that use iron ore, sponge iron and melting scrap to produce steel; and (3) Forward linkage with about 1,200 re-rollers that roll out semis into finished steel products for consumer use.
Structural Weaknesses of Indian Steel Industry
Although India has modernized its steelmaking considerably, however, nearly 6% of its crude steel is still produced using the outdated open-hearth process.
Labour productivity in India is still very low. According to an estimate crude steel output at the biggest Indian steelmaker is roughly 144 tonnes per worker per year, whereas in Western Europe the figure is around 600 tonnes.
India is deficient in raw materials required by the steel industry. Iron ore deposits are finite and there are problems in mining sufficient amounts of it. India's hard coal deposits are of low quality.
Insufficient freight capacity and transport infrastructure impediments too hamper the growth of Indian steel industry.
Strengths of Indian Steel Industry
• Low labour wage rates
• Abundance of quality manpower
• Mature production base
• Positive stimuli from construction industry
• Booming automobile industry
Outlook The outlook for Indian steel industry is very bright. India's lower wages and favourable energy prices will continue to promise substantial cost advantages compared to production facilities in (Western) Europe or the US. It is also expected that steel industry will undergo a process of consolidation since industry players are engaged in an unfettered rush for scale. This is evident from the recent acquisition of Corus by Tata. The deployment of modern production systems is also enabling Indian steel companies to improve the quality of their steel products and thus enhance their export prospects.