A Nu Rag

SUMMER INTERNSHIP PROJECT REPORT ON TOPIC Find Out the Consumption of Steel Products in Sugar Mills

Essar Steel Limited SUBMITTED FOR PARTIAL FULLFILLMENT FOR THE AWARD OF “POST GRADUATE DIPLOMA IN MANAGEMENT” APPROVED BY AICTE

UNDER THE G UID ANCE OF: MR. RAJEEV JOSEPH BRANCH MANAGER, STEEL RETAIL BUSINESS ESSAR STEEL LIMITED

SHRI RAMSWAROOP COLLEGE OF ENGINEERING AND MANAGEMENT TEWARIGANJ ,LUCKNOW-FAIZABAD ROAD, LUCKNOW

2008

Anurag Viswakarma PGDM07004

ACKNOWLEDGEMENT

8/3/2008

I would like to thank Mr. Rajeev Joseph (Branch Manager) Steel Retail Business for his support and encouragement during this project. The opportunity providing by him was an immense learning experience.

The help receive from Mr. Abhinav Kapoor, Steel Retail Business was something without which the project would not have been complete. Their insight as well as guidance helped me to understand the essentials of the project. I would like to thank them for their support.

I extend my gratitude to the entire management team for guiding me during the project.

Anurag Viswakarma

Introduction The steel industry is expanding worldwide. For a number of years it has been benefiting from the exceptionally buoyant Asian economies (mainly India and China). The economic modernization processes in these countries are driving the sharp rise in demand for steel. In India the rise is likely to be higher than average. Indian crude steel production will rise from 38 million tonnes in 2005 to 68 million tonnes in 2015.

Continuous casting technology making inroads. The biggest boost to efficiency in the steel industry has come from the increased use of continuous casting – an indicator of the modernity of the production process. Its share of Indian crude steel output has climbed from 38% in the mid-1990s to 66% now. India is thus well on its way to joining the ranks of the leading steelmakers among the industrial nations. Companies are bursting onto the world market. The Indian steel ministry plans to raise the export share from 15% at present to 24% in the next 15 years. Big companies like SAIL, Tata Steel and Essar Steel want to become global players by acquiring stakes in foreign firms. India is one of the world’s fastest expanding economies. Over the last ten years the booming economy has posted real growth of 6% p.a., compared with less than 4% in the 1950s and 1960s. In 2005 growth accelerated to about 8%, while in 2006 and 2007 any let-up should be slight. The liberalisation of the economy is the key to the boom. India has opened up more to the global economy especially since 1995. Import tariffs have been more than halved since 1990. However, they are still much higher than in other Asian states. Furthermore, India has a broad base of highly qualified technicians and engineers. Each year some 200,000 engineering graduates leave Indian universities, about six times as many as in Germany. In regions where economic catch-up is being played the demand for steel is of course particularly high. In India demand is being driven up by mammoth infrastructure projects, like the construction of dams, ports, power plants, railways and motorways. In addition, the key industrial sectors (such as construction, automotive and shipbuilding) are experiencing rapid growth. With salaries and wages rising, consumers are becoming more discerning with regard to their cars, household appliances and the like, which is also boosting steel demand.

Shashi Ruia, chairman, Essar Steel, notes that many companies from the developed world are looking at setting up manufacturing facilities in emerging economies that have natural resources, both in terms of raw material and energy. “Industry consolidation is gathering pace as companies devise new strategies to tackle fragmentation in the industry,” he points out. “Consolidation has become a major growth strategy. India is emerging as a major destination for new facilities in steel making, and global majors have already made progress for their plans for ‘Destination India.’ Essar has invested about $450 million in expansion and modernisation projects; it plans to expand capacity to 4.6 million tonnes per annum. Essar Steel has developed steel grades for high-end applications in the automobile and white goods sectors. It is also a leader in large scale infrastructure development sector in the construction segment.

INDIA HAS A POTENTIAL FOR EXPONENTIAL GROWTH IN STEEL CONSUMPTION Peak Point Point of Saturati on

Singapore Japa

n

Trigg er Point

Ch i a n

USA

India

India will be a part of the new Steel world …

Over All Market Share of Essar Steel Limited

ISPAT 12%

OTHERS 4%

SAIL 38% JSW 13%

ESSAR 15%

TATA STEEL 18%

Organization Profile Essar Global Limited (EGL) is a diversified business corporation with a balanced portfolio of assets straddling the manufacturing and services sectors: Steel, Energy, Power, Communication, Shipping & Logistics, and Construction. EGL, through its six sectoral holding companies, has a firm value of over US $ 50 billion (INR 200,000 crores) and employs 30,000 people worldwide. With a firm foothold in India, Essar Global has been focusing on global expansion with projects/investments in Canada, USA, Africa, the Middle East, the Caribbean and South East Asia. Among its recent global acquisitions are the Ontario (Canada) based Algoma Steel and USbased companies, Minnesota Steel, as well as Global Vantedge.

EGL has an excellent track record, having succeeded in the capital intensive and competitive manufacturing sectors. Better focus for each business through integration, incorporation of stateof-the-art technology and innovative in-house research has made Essar Global a leading player in each of its businesses.

History The Essar group was founded over three decades ago by the Ruia family and is headed by Chairman Shashi Ruia and Vice-Chairman Ravi Ruia. The Ruia family has been in business and trading since the 1800s, when the family first moved to Mumbai from Rajasthan in Western India. In 1956, Nand Kishore Ruia, the group founder, moved south to Chennai to begin independent business activities. In 1969, following the untimely demise of Nand Kishore Ruia, his sons Shashi and Ravi Ruia took over the group. Along with a team of seasoned professionals, the Ruias have built the perfect platform for Essar's accelerating growth. With a strong foundation at India’s industrial core and in the sunrise services sector, Essar has stayed firmly in the forefront of new opportunities. An early start has made us a key player in India's exploding telecom market. Similarly, we set up India’s first independent power plant and its first new generation private steel plant.

Mission

To create enduring value for customers and stakeholders in core manufacturing and service businesses, through world-class operating standards, state-of-the-art technology and the 'positive attitude' of our people.

Management Team Essar Group

Shri. Shashi Ruia

Chairman

Shri. Ravi Ruia

Vice Chairman

Shri. Prashant Ruia

Director

Shri. Anshuman Ruia

Director

Ms. Smiti Ruia

Director

Shri. Rewant Ruia

Director

Corporate Functions Mr. S. V. Venkatesan

Resident Director - Chennai

Mr. J. Mehra

Resident Director - New Delhi

Mr. Jayesh Buch

Resident Director - Ahmedabad

Mr. Madhu S. Vuppuluri

Resident Director - New York

Mr. Suresh Sundaram

Director - Corporate Aviation

Mr. Adil Malia

President - Human Resources

Mr. Sunil Bajaj

President - Corporate Affairs

Mr. Mukesh Bhavnani

President - Legal

Mr. Vijay Mehra

Chief Information Officer

Mr. Manish Kedia

Head - Corporate Communications

Mr. N. S. Paramasivam

Head - Forex & Treasury

Mr. Dinyar M. Jivaasha

Head - Corp. Risk & Ins. Mgmt.

Essar Steel Limited Overview

Essar Steel is a versatile manufacturer, capable of producing highly customized products. Catering to quality-conscious niches, it compete against top-of-the-league international steel producers. For example, Essar Steel are one of the few manufacturers globally who can make API grade steel with low sulphur. Essar Steel cater to a wide variety of product segments including roofing, automobiles, oil and gas, shipbuilding, fabrication and white goods. Domestically, the company have emerged as leaders in product development, quality and service. To maintain and enhance leading position, the R&D team is constantly developing new grades and applications.

No wonder Essar are India's largest exporter of flat products, selling almost one-third of the production to the highly demanding US and European markets, and to the growing markets of South East Asia and the Middle East. A number of major client companies have approved the steel for their use, including Caterpillar, Hyundai, Swaraj Mazda, the Konkan Railway and Maruti Suzuki. Essar Steel is among the 25 percentile of lowest cost producers world-wide and has acquired extensive quality accreditations. Essar’s lean team gives us one of the highest productivities and lowest manpower costs among steel plants internationally.

Seamless integration A major strategic advantage is Essar’s high level of forward and backward integration. The company are totally integrated - from raw material to finished products, adding value at every stage of the manufacturing process.

Bailadilla Ore Beneficiation Plant At Bailadilla, where some of the world's richest and finest ore is available, Essar has set up a beneficiation plant of 8 million tonnes per annum (MTPA) capacity, which ensures the highest quality iron ore. The iron ore slurry is pumped through a 267 km. pipeline (the second longest in the world) to the pellet plant, yielding advantages of quality, cost and real time inventory management.

Visakhapatnam Pelletisation Plant T

he slurry is received at our Pellet plant at Visakhapatnam, which has a capacity of 8 MTPA, providing vital raw material for the steel plant at Hazira.

Hazira Steel Complex Essar steel complex at Hazira, Gujarat, houses a 5.0 MTPA sponge iron plant, the world's largest gas-based HBI producer. The plant provides raw materials for our state-of-the-art 3.0 MTPA hot rolled coil (HRC) plant, the first and largest of India's new generation steel mills. This plant, fed with inputs from three electric arc furnaces and three casters, increasing its capacity to 4.6 MTPA. The complex's sophisticated infrastructure includes independent water supply and power, oxygen and lime plants, a

township and a captive port capable of handling up to 8 MTPA of cargo with modern handling equipment like barges and floating cranes.

Steel Plant (Oversease)  Essar Indonesia  Algoma Steel, Canada  Minnesota Steel, USA  Essar Vietman  Essar Steel Carribean Ltd.

Process Flow: Hazira Steel Complex

Strategic Location From its location on the West Coast, about 260-kms north of Mumbai, Essar Steel has a major advantage with respect to the inward movement of raw materials and the outbound movement of finished goods.The captive port - capable of handling 6 MTPA of cargo annually - is loaded with facilities like sea-going floating cranes, articulated barges and other marine equipment.

The Technological Advantage Essar Steel employs the world's most advanced technology from the best equipment suppliers. Its many firsts include an indigenous Hot DRI charging system, the largest DC electric-powered steel plant and India's first Continuous Tandem Cold Mill (CTCM). Level II automation aided by

one of the largest ERP installations in India by SAP and an Integrated Marketing and Production System (IMPS) from DEC of USA make Essar Steel completely future-ready.

Answering the World’s need for Steel With technology that surpasses global benchmarks, Essar Steel produces grades that many Indian steel mills can only aspire to. The market leader in many niche segments in the domestic market, Essar Steel is one of the leading suppliers for pipelines, automobile manufacturers, construction and other sophisticated industries, as it provides a competitively priced, yet superior quality, alternative to high-grade imports. In the international market, Essar Steel is positioned alongside prime European and Japanese steel producers. Little surprise then, that Essar Steel is the largest exporter of flat products from India. Moreover, Essar Steel is a leading supplier of API grade steel in the world for pipelines in the oil & gas sector, having helped create pipelines that stretch 8500kms across 5 continents.

Quality that world Approves What makes Essar Steel the world's preferred steel maker is the wide product range that is completely customisable to unique customer needs along with flexible delivery options. Essar Steel's strong standing in domestic and international markets is also due to its lofty quality standards. Ever the leader, Essar Steel was the first integrated steel plant in the country to obtain the prestigious ISO 9001 for all operations. In addition, it was the first Indian steel plant to achieve the ISO 14001 accreditation for Environmental Management System. Obviously, quality-driven processes would only create products that surpass international quality standards as well. Certifications for its products include Lloyds Register (UK) for exports, IRS (Indian Registrar of Shipping), DNV, ABS,TUV, BIS(Bureau of Indian Standards), OITC and IBR (Indian Boiler Regulation Act).

The 24 Carat Edge To develop a unique identity and differentiate its products, Essar Steel launched 24-Carat Steel, the first branded steel of its kind in India. 24 Carat Steel defines the core properties of Essar Steel as well as the total offering from the company in terms of product

quality, standards, delivery systems and customer service. 24 Carat Steel today finds application in diverse specialised and demanding industries - from general engineering to automotive and shipbuilding. Superior production processes, world-class technology and a committed workforce has helped Essar Steel develop value-added steel and placed the company in the league of a select few worldclass steel manufacturers - thus casting the 24 Carat promise in concrete.

Competitors

The retail thrust

-

Essar Steel Hypermart’ is a pioneering effort in retailing of steel products and has connected successfully with small and medium customers. Essar Steel Hypermart is India’s largest chain of retail stores for steel products. Essar Steel Hypermart has a pan India presence with 65 Hypermarts and 15 Express marts.

Essar have a strong workforce of over 230 employees—across the country—who are committed to meeting the requirements of small manufacturers, local fabricators and engineering and construction companies who today buy steel from local intermediaries.

All Essar Steel Hypermarts store various types of steel products. After selecting your material at any retail outlet, you need to make advance payments of that product in that outlet. After your payment is cleared, you can take delivery of your materials.

At Essar Steelhypermart you can choose from a comprehensive range of flat steel products for variety of applications. The five Value propositions of Essar Steelhypermart are: 1. Trust of Essar Quality 2. Immediate Delivery 3. Transparent Pricing 4. Easy Contactability 5. Pan-India presence

The Management Team of Essar Steel hypermart    

Shri. Prashant Ruia Mr. Vikram Amin Mr. Robin Banerjee Mr. P. R. Dhariwal

Director Director – Sales & Marketing Director – Finance Director – Commercial

   

Mr. Mr. Mr. Mr.

Dilip Oommen Head – Hazira Operations Girish Rao C.E.O. Retail Business Sudhanshu Tripathi Head –HR – Steel Business Group N. B. Vyas Company Secretary

Products Hot Rolled Product Essar Steel produces the finest quality of 24 carat Hot Rolled steel in India. Since its introduction, Essar’s Hot Rolled steel continues to be a critical input for highly demanding applications. Essar’s Hot Rolled Products are available in plates, sheets and coil form.

Application General Engineering, Automobiles, Infrastructure, Oil and Gas pipelines, Line Pipes etc.

Specification and Dimensions Thickness: 1.6mm – 20mm Width: 1250mm – 2000mm Length: 2500mm – 8000mm

Galvanised Coils and Sheets

Essar Steel’s 24 carat Galvanised Steel with a guaranteed zinc coating of 120 gsm offers best resistance to corrosion. To suit a variety of applications, they are available in 3 different surface finishes.

Application Air-conditioning and heating ducts, automotive under-body parts and muffers, water heaters and stoves, coolers and refrigerators

Specification and Dimensions Thickness: 0.25mm – 1mm Width: 900mm – 1220mm Length: 2500mm

Cold Rolled Products Essar Steel’s 24 carat Cold Rolled steel is a combination of high strength ductility, consistent mechanical properties, close dimensional tolerance and superior surface

Application Automotive body and components, white goods, pipes and tubes, drums and barrels. Specification and Dimensions Thickness: 0.4mm – 2.5mm Width: 900mm – 1500mm Length: 2500mm

finish.

Chequered Plates-

Essar’s 24 carat steel Chequered Plates are high friction plates ensuring maximum skid resistance. These plates ensuring maximum skid resistance. These plates are available in tear drop pattern with a maximum height of 1.2 mm.

Application Multiple use in flooring , Grating over close gutter / culvert and Structural fuctions. Specification & Dimensions Thickness: 3mm – 8mm Width: 1250 mm Length: 5000 mm

SONA GC Sheets Essar SONA GC Sheets with a guaranteed zinc coating of 120 gsm offer longer life and better durability. The extra wide 1200mm sheet is another breakthrough solution that results in big savings for customers. Application Roofing for low-rise structures, rolling shutters and sheds Specification and Dimensions Thickness: 0.25mm – 0.6mm Width: 760mm – 1200mm Length: 2440mm – 4270mm

RESEARCH METHODOLOGY Background of study:The ESSAR STEEL HYPERMART is a new concept of retailing of steel. The purpose of establishing Essar Steel Haypermart to provide better services to the customer for purchasing steel as par requirement. Essar steel hypermat of Lucknow has covered local market of steel. Now there are searching new market for selling steel. They want to find out the sugar mills which required steel for procurement.

RESEARCH OBJECTIVE  To find out the consumption pattern of steel in sugar mills for procurement.

RESEARCH DESISN A research design is purely & simply the framework or plan for study that guides the collection and analysis of data. It is a blue print that is followed in completing a study. Descriptive is used to conduct this survey.

(1)

RESEARCH DESIGN: A research design is purely & simply the framework or plan for a study that guides the collection and analysis of data. It is blueprint that the followed in completing a study exploratory research is used to conduct this survey.

(2)

RESEARCH TOOL  Questionnaire

SELECTION OF THE SAMPLE It becomes impossible to contact each and every individual of the population due to limitations of essential resources like time and money. Therefore, the study is preferable borrowed down to a representation sample make the study more manageable. Keeping in view of the objective and recourses limitation of the study sample of 12 respondents are considered. The selection section is representative of the population and is accurate and practicable.

DATA COLLECTION METHOD There are two method of collecting data:

1). Primary data 2). Secondary data

Primary data Primary data are those data which are collected for the first time. It is better to go for primary data since it is first hand information and there is less chance of personnel bias and information can be collected with accuracy at the same time. It could be re tabulated and survey concerned in various forms this data can be used. For collecting data I have chosen the questionnaire method. Source of primary data  Questionnaire  Personal interview

SECONDARY DATA Secondary data are not first hand information. Secondary data are those that have been collected by other organization like government agencies, financial organization, new papers and magazines. They collect original data analyze and tabulated data and then published.

SAMPLING PLAN The following factors have to be decided with in the scope of sampling plan:

A. SAMPLING UNIT

First step in developing any sample design as to clearly define the set of objectives technically called the universe to be studied. The universe can be finite or infinite; my universe was finite as I opted for specific sugar mills in U P east region.

B. SAMPLE SIZE This refers to the people surveyed through large samples are more reliable but more reliable but due to shortage of time and money a small representative of 15 respondents are chosen.

C. SAMPLEING PROCEDURE This refers to procedure by which respondents should be chosen. In order to obtain a representative sample a probability sample of population was drawn. Probability sampling can be of following types:  Cluster Sampling In this case stratified random sampling was done since respondents were classified into well define classes or strata’s that were distinct from each other.

Data Analysis List of Sugar Mills-

Name of Concern

location

Haidergarh Chini Mills

p.o. Pokhara Haidergarh, Barabanki

U. P. state sugar & cane development corporation ltd.

Jarwal road, Bahraich

Basti Sugar Mills Co. ltd(A unit of bajaj hindustan)

Basti, Near Railway Station

Khalilabad Sugar Mills Pvt. Ltd

Khalilabad, Sant kabeer nagar

Rauzagaun Chini mills (A unit of BCM ltd.)

Rauzagaon, Dist. Barabanki

Balrampur Chini Mills Ltd. Unit- Babhnan

P.O. Babhnan, Dist. Gonda

Balrampur Chini Mills Ltd. Unit- Balrampur

P.O. & Dist. Balrampur

Tulsipur sugar Co. (A unit of BCM ltd.)

P.O. Tulsipur, Dist.Tulsipur

Dalmia Chini Mills, unit- Ramgarh

Ramgarh,Dist. Sitapur

DSCL Sugar Hariawan

Vill., P.O. Hariawan, Hardoi

The Kissan sahkari Mills Ltd.

Mahmoodabad(Awadh0 Sitapur

The Seksaria Biswan Sugar Factory Ltd.

Biswan, Sitapur

Utility of steel production in sugar mills The sugar mills are using flat steel products. The flat steel consumption in sugar mills are around 500 tons. The utility of flat steel product in sugar mills as requirement. The procurement of mills is running after production. Due to corrosion in sugar mills there is lot of procurement work.

The sugar mills use the flat product in following things: Cane Carrier Chain Links  Cane Carrier Side plate  Rake type inter carrier  Mill imbibition piping  Donnely Chutes  Whirler tanks, screened juice and unscreened juice tanks  Bagasse Carrier through  Clarifier mud scrapers  Juice sulphiter - Inner Drum  Juice Sulphiter - Outer Shell  Juice heater covers  Juice Heater Condensate lines  Vacuum Crystallizer Topdome  Pan and last evaporator vessel Vapour lines  Condensate lines for Evaporator  Molasses gutters behind centrifugals  Partition plates inside continuous centrifugals  Centrifugal Bucket ribs  Hoppers - Trough and Base plate near connecting rod

The sugar mills are buying flat steel products and utility according the requirement. The company are also using different steel products like angles, channels, round road etc. The new manufacturing sugar plants are using all types of flat steel e.g. Rot rolled, galvanized, corrugated sheet and chequered plates.

Approx. Consumption of Steel – The steel consumption in procurement of Sugar mills is based upon life time of the plant. If plant is more than 5 years then it has more procurement work. Those units which are working 2-3 years have less procurement work. The approx. consumption of flat steel products is 480 tonnes in between 12 Sugar Mills.

Steel Consumption in Different Sugar Mills The Kissan sahkari Mills Ltd. (60 tonnes) Balrampur Chini 11% Mills Ltd. UnitBalrampur, Tulsipur sugar Co. (A unit of BCM ltd.) (10 tonnes) 2% Balrampur Chini Mills Ltd. UnitBabhnan, The Seksaria Biswan Sugar Factory Ltd.(120 tonnes) 22%

Haidergarh Chini Mills, DSCL Sugar Hariawan(20 tonnes) 4%

U. P. state sugar & cane development corporation ltd. (60 tonnes) Basti Sugar Mills 11% Co. ltd(A unit of bajaj hindustan)(50 tonnes) 4% Khalilabad Sugar Mills Pvt. Ltd (50 tonnes) 9% Rauzagaun Chini mills (A unit of BCM ltd.), Dalmia Chini Mills, unitRamgarh(200 tonnes) 37%

THICKNESS PREFERED BY SUGAR MILLS FOR EQUIPMENETS:Thickness is important thing for flat steel product. The different types of equipments require different types of thickness steel. Mostly sugar units used 8mm and 6mm steel plates. The size of steel plates used in company as per requirement. Sugar mills are using mostly 1-20mm plates because the thickness of plates are effected by corrosion. Special equipments are required 2050mm plates but they are rarely used. List of thickness of Sugar Mills:Location Cane Carrier Chain Links Cane Carrier Side plate Rake type inter carrier Mill imbibition piping Donnely Chutes Whirler tanks, screened juice and unscreened juice tanks Bagasse Carrier through Clarifier mud scrapers Juice sulphiter - Inner Drum Juice Sulphiter - Outer Shell Juice heater covers Juice Heater Condensate lines Vacuum Crystallizer Topdome Pan and last evaporator vessel Vapour lines Condensate lines for Evaporator Molasses gutters behind centrifugals Partition plates inside continuous centrifugals Centrifugal Bucket ribs Hoppers - Trough and Base plate near connecting rod

Existing Thickness (mm) 18 8 8 5.4 8 8 6 5 6 10 30 5.4 6 8 4 6 5 12 6

Thickness Prefer By Sugar Mills for different Equipment Cane Carrier Chain Links J uice heater covers(30mm) (18mm) 5% 5% Centrifugal Bucket ribs (12mm) 5% J uice Sulphiter - Outer Shell(10mm) 5%

Cane Carrier Side plate, Rake type inter carrier, Donnely Chutes, Whirler tanks, screened juice and unscreened juice tanks, Pan and last evaporator vessel Vapour lines (8mm) 26%

Condensate lines for Evaporator(4mm) 5%

Clarifiers & Scrapers, Partion plates inside continious centrifugal(5mm) 11%

J uice Heater Condensate lines,Mill imbition Piping(5.4mm) 11%

Bagasse Carrier through, J uice Sulphiter- Inner Drum, Vaccum Crystaliser tap dom,Molasses gutters behind centrifugals,Hoppers Trough and Base plate near connecting rod(6mm) 27%

Mode of Purchase and PreferenceSugar mills are purchasing steel product company outlet as well as trade market. The SAIL outlet of Kanpur is main company outlet. Trade market is the market of Kanpur and Ghaziabad. The mode of purchase from company outlet is the cash mode or direct payment mode and from trade market the payment mode is credit as well as cash. Preference of sugar mills for flat steel product is mainly for two companies SAIL  TATA STEEL

Company prefered by Sugar Mills for Steel product ESSAR 0% TATA 45% SAIL 55%

TATA

SAIL

ESSAR

TIME PERIOD OF STEEL CONSUMPTION:The production time period in the sugar mills is in between Nov-March. This is the production period of sugarcane crop. After this duration (Nov-March) sugar mills are engage in the procurement of plant.

SERVICES EXPECTED FROM COMPANY OUTLET/ TRADERS:Mostly sugar mills expected services from the company or traders: Time Delivery of Products (STEEL)  Easy Payment Mode.

Contribution Essar Steel Hypermart in Sugar Mills Market Share of Consuption of Steel in Sugar mills

ESSAR 0% TATA (216 tonnes) 45% SAIL (264 tonnes) 55%

TATA (216 tonnes)

SAIL (264 tonnes)

ESSAR

Ownership of Sugar Mills Ownership

Ten

8%

8%

84%

Private

Semi- Private

Govt.

Sugar mills- Private , One Sugar Mill- Govt., One Sugar Mill-Semi- private

Using of Flat Steel in Sugar Mills

All Sugar Mils are using flat steel products. Other Steel Products use the Sugar Mills

as requirement 33% angles , channels 59%

angles, channel & round rod 8%

angles , channel

angles, channel & round rod

as requirement

Angles, Channel- Seven Sugar Mills Angles, Channel & Round rod- One Sugar Mill As Requirement- Four Sugar Mills

On quality Basis Sugar Mills preference

All Sugar mills are using quality product.

Awareness of Essar Steel Hypermart

Yes- One Sugar Mill

No- Eleven Sugar Mills

Test Certificate Requirement of the Sugar Mills

All Sugar Mills are receiving the Test Certificate.

FINDIDINGS  There are 10 private Sugar Mills, One government Mill & One Co- operative Mill out of 12 Sugar Mills.  The sugar mills are running currently is between 5-10 years old due to this they have required huge amount of flat steel for procurement.  The corrosion problem in these sugar mills are in gas pipeline, juice tanker, gutter etc.  Sugar mills (7out of 12) have there own power supply arrangement. The power plants production capacity is between 25-35 MV.  In U.P. East main players in sugar production are  Balrampur Chini Mills Ltd.  U.P. State Sugar And Cane Development Corporation Ltd..  Dhampur Chini Mills Ltd.  Bajaj Hindustan Ltd.  Dalmia Chini Mills Ltd.  The main utilization of the steel product in sugar mills is pipes, platform, tanker etc.  Total consumption of flat steel required in these sugar mills for procurement is approximately 480 tons.  These sugar mills are preferred steel of TATA or SAIL. They purchase steel from Kanpur and Ghaziabad.  Main competitors of ESSAR is TATA & SAIL in this region.  These mills maintain inventory and they need credit time for payment.  Lack of awareness about ESSAR HYPERMART.  These sugar mills want TEST CERTIFICATE while purchasing steel.

 The two main departments are involved in purchasing steel for procurement: Engineer (provide quantity and quality of steel).  Purchase Department (purchase steel from market).

SWOT ANAYLISIES OF ESSAR STEEL HYPERMART (LUCKNOW) STRENGTH  The well know company in steel manufacturing.  The only one private player present in steel retailing.  The first steel cutting plant in lucknow region.  Providing genuine product.

WEEKNESS  Lack of awareness.  Limited product line.  Lack of market activities.

OPPROTUNITIES  Fulfill the requirements of customer demand with in the time.  Location provide help in capturing market.  Visibility of product.

THREATS

 Other company outlet and local traders.  If Essar Hypermart doesn’t cash out the opportunity of first entrant, then there will be always a fear of other entrant.

Suggestions The consumers are aware about Essar Steel, but consumers are not still aware about Essar steel Hypermart. Therefore, Company should increase the awareness in Sugar Mils about Essar Steel Hypermart, by following ways:

 By sending Occasional greeting card along with the Company Brochure to Sugar Mill’s General Manager and Purchase Manager.  Sales personnel should visit Sugar Mills at the time procurement as well as at the time of production. This will increase the loyalty of the company towards the Consumers (Sugar mills), and this will help in increasing the sales of the Essar Steel.  By starting delivery to the destination at the minimal cost for the heavy purchasers.  Make availability of steel in 1 ton and 2 ton packaging along with 5 ton, so that purchaser doesn’t face any problem, who have to purchase 8 ton or 7 ton. These packaging will help in making the combination.

Conclusion Under the brand name of Essar Steel, it has well segmented its market and tried its best to served its customer according to their needs and personalization. The Essar Steel provides wide range of flat steel products, it has managed to give competition to huge players like SAIL, TATA Steel, ISPAT etc.. The main objective of Essar Steel is to provide the world class steel to the customer. The Company can get the opportunity to enter the new market of Sugar Mills of U P East. Sugar Mill’s person wants to get the steel product at minimum cost so they purchase the steel from the nearest market to reduce the transportation cost. Essar Steel can provide the steel in Lucknow to the Sugar Mills. This is an opportunity for both entity. Recently Essar Steel Hypermart, Lucknow started steel cutting facility which is beneficial for the company to increase their sales.

ANNEXURE Questionnaire (Find Out the consumption of steel in Sugar Mills) • • • • • •

• •

Name of Sugar Mill LocationOwnershipGovt. Pvt. At which time period sugar mill is working--------------------------------------------------Do you use the flat steel productsYes No If Yes then, what do you preferHot Rolled Products Cold Rolled Coils & Sheets Galvanized Coils & Sheets Others If No then, What kind of steel product you use--------------------------------------------------------------------------------------------------------In terms of volume, how much steel product you use in a year-

Below 100 tons 100- 250 tons 250- 500 tons 500 < above More specify What is your utilization of steel products-

• •

---------------------------------------------------------------------------------------------------------Which type of steel you prefer (on quality basis) Company Product Trade Product

•

If trade product then, what are the benefits of purchasing from trade-

•

--------------------------------------------------------------------------------------------------------From which trade market do you purchase the steel and why?

•

--------------------------------------------------------------------------------------------------------What are the drawbacks of company outlets?

•

--------------------------------------------------------------------------------------------------------How many company outlets do you know in your area?

•

--------------------------------------------------------------------------------------------------------At what time in the year you purchase the steel-

•

--------------------------------------------------------------------------------------------------------Which department deals with procurement of steel-

• • • •

Name of procurement manager ------------contact No---------------Do you know about Essar Steel HypermartYes No Do you require the test certificate with the productYes No What type of service you want regarding the steel product-

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BIBLIOGRAPHY www.essar.com www.essarsteel.com www.steelhyparmart.com www.google.com