Business Marketing Final Project

8/8/2019 Business Marketing Final Project

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BUSINESS MARKETING FINAL PROJECT

Indian Steel Industry

Business Plan (S.S Ingots) Virat alloys Pvt. Ltd

Submitted By-:

Aditya Agarwal 2009041

Ankit Parmar 2009046

Arpit Singh Parihar 2009054

Amal Agarwal 2009059


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Table of contents

1.Introduction

2.Executive Summary

3.Overview of Indian steel industry

4.S S ingots manufacturing and marketing.


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Vision: To stand up to the name (Virat Gigantic)

Mission: To be amongst the leading S.S. ingots & sheets manufacturers

Company Brief:

Established in the year 2008, Virat Alloys (P) LTD. is all set to be amongst leading S.S. Ingots,

S.S. Sheets Manufacturer and Supplier in India. At the booming period of industrial revolution

our first target is to manufacture best quality S.S Steel Ingots and S.S. Steel Sheets suitably

matching industrial and utensils manufacturing need. We use best quality of raw materials and

scraps for production. Our adaption to latest technological inputs and multifaceted infrastructural

base would ensure quality of S.S. Ingots as well S.S. Sheets.

Primary Business Type : Manufacturer

Products We Offer : S.S. Ingots, S.S. Sheets

Steel Ingots:

Our company is targeting to be amongst prominent S.S. Ingots and S.S. Sheets manufacturers in

India. We deal with manufacturing and supplying of S.S. Ingots, S.S. Sheets. Our products are

widely acceptable because of its quality control assurance and use of best raw materials. We

ensure to offer S.S. Ingots, S.S. Sheets at very reasonable rates

Executive Summary

Today, steel industry is on an upswing the world over. Indian steel making units, both in private

and public sectors, remain upbeat about their improved volume of turnover, capacity utilization,

sales and profit margins. A number of MOUs have been signed by major steel producers, both


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domestic and international, with the mineral rich states signifying possibilities of marked

increase in both Greenfield and Brownfield production capacities.

This turnaround is to some extent a result of favorable global market conditions created by a

huge surge in steel production and consumption in China. But the stimulus has also been the

demonstration effect of a booming economy. In fact, the resurgence of Indian steel industry has

moved parallel to the post liberalization economic revival and the resultant buoyancy in sectors

like construction, infrastructure, real estate and transport which account for most of the total steel

usage in the country

An important potential area for steel usage resulting from economic growth and rising income

levels is the household sector, especially rural households. However, unlike urban areas, in the

rural areas concerted efforts would be required to convert this potential into actual consumption

of steel and steel based products. In this project we will take a holistic view of Steel Industry in

context with B2B Marketing , We will also try to analyze the marketing strategies of the major

steel companies for marketing the different product lines they are operating in and also a totally a

different set of consumers they are serving by offering different product lines.

As mentioned above steel is the major sector for any countrys economy, its the backbone of the

infrastructural development of the country thus in a country like India which is growing ever

since the economic boom seems to be promising in steel sector.

As there are different product categories available we have chosen SS ingots to be analyzed and

its marketing strategies adopted by various manufacturers.

GOVERNMENT POLICY AND REGULATORY FRAMEWORK

Steel is an essential commodity for any country since it is used in industries like construction,

automobiles and engineering .so we cannot overlook the government regulations for the sectors

when we go for marketing of any such product which is highly government regulated .Also, as

steel prices began to heat up, pressure mounted on the government to keep the prices under


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check to avoid high inflation. This mandates the governments to protect their steel industry by

adopting a high import duty structure and act as an enabler/regulator of prices.

New Steel Policy:

In order to meet increasing domestic and international demand, the Government has formulated a

draft national steel policy, which targets a production of over 110 MT by the year 2020.

The basic objective of the National Steel Policy is to create enabling conditions for a globally

integrated Steel Industry in India and the expansion of its production base adequately.

It also plans to address other issues to support the growth of the industry like adequate

infrastructure to be developed for mines in terms of road and rail network. Enhance capacity of

existing ports and opening new ports on the east coast for moving planned quantity of

inputs/outputs.

Licensing & Import Duty:

The economic reforms initiated by the Government since 1991 have made the steel sector more

efficient and competitive. Restrictions on import and export of steel have been removed and

import duty rates have been reduced drastically. The Advance Licensing Scheme under the

Export-Import Policy allows duty free import of raw materials for exports.

Indian Steel industry An overview

The Indian steel industry is currently going through an expansionary phase backed by a

liberalized policy environment. Prospects of domestic demand appear to be excellent driven by

high investment rate, accelerated growth in the manufacturing industry and expansion in physical

infrastructure creation. The first four years of the Tenth Five Year Plan have seen robust growth

of the steel industry with significant increases in both production and consumption. Crude steel

production grew at the rate of 10.5% annually from 27.964 Million Tonnes in 2001-02 to 41.660

Million Tonnes in 2005-06. This growth was driven by both capacity expansion (from 34.172

Million Tonnes in 2001-02 to 45.693 Million Tonnes in 2005-06) and improved capacity

utilization (from 82% in 2001-02 to 91% in 2005-06). Production of finished non-alloy steel

grew at the annual rate of 9.8% from 30.635 Million Tonnes in 2001-02 to 44.544 Million


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Tonnes in 2005-06. Consumption of finished non-alloy steel also kept pace with production and

grew at an annual rate of 9.3% from 27.43 Million Tonnes in 2001-02 to 39.19 Million Tonnes in

2005-06. The average increase in production during the 10th Plan was 3.5 Million Tonnes per

annum as compared to just 1.6 Million Tonnes per annum during the 9th Plan (1997-2002). The

growth in consumption was even more impressive with the annual growth rate more than

doubling to 9.3 % in 10th Plan from just 4.4% in 9th Plan. In the last five years the Indian

Sponge Iron industry grew at an annual rate of 23.5%. Today, India has become the largest

producer of sponge iron in the world with a total production of 12.6 Million Tonnes in 2005-06

as against 5.4 Million Tonnes in 2001-02. Expansion of this sector supplying a substitute for

scrap, has been helped by limited scrap availability and resultant high prices with a rapid rise in

production in the secondary sector. This growth Is the result of a remarkable expansion in the

small-scale coal based units with short gestation period and low capital intensity concentrated

largely in the iron-rich states of Jharkhand, Orissa and Chhattisgarh. On the other hand, in the

large-scale technologically sophisticated gas based sponge iron units production has remained

stagnant.

Between 2001-02 and 2005-06, production of Special and Alloy steel has grown from 0.99

Million Tonnes to 2.28 Million Tonnes and consumption from 1.09 Million Tonnes to 2.25

Million Tonnes. Of the total output, Stainless Steel accounted for about 1.7 Million Tonnes in

2004-05. India is currently the 7th largest producer of stainless steel in the world and has

developed niche export markets in countries like China. The recent growth in this segment has

been stimulated by use of stainless steel in sophisticated industrial applications and also in

construction activities Today world steel prices have become more volatile with sharp

fluctuations within short time gaps. The differences between the contracted price and spot

prices have also widened in the recent years. This is more apparent in the case of flat products,

especially Hot Rolled flat products, as against the long products.

S S Ingots

We have chosen SS ingots as a product category for our Project


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An ingot is a material, usually metal, that is cast into a shape suitable for further processing.

Non-metallic and semiconductor materials prepared in bulk form may also be referred to as

ingots, particularly when cast by mold based methods

Ingots require a second procedure of shaping, such as cold/hot working, cutting or milling to

produce a useful final product.

Manufacturing process for S.S. Steel Ingot

The Process of manufacturing Ingots from raw materials such as scraps and it can be broadly

classified as follows :

Melting Of Raw-Material :

Selection of Raw Material

The Quality of Raw material required depends upon the type of furnace in use. When induction

Furnace is utilized, as is the case, the ideal quality of raw material should be clean S.S Steel

Scrap of low carbon content.


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Charging and Loading of Raw Material into Furnace

The scrap is stored near to the furnace for easy operation, scrap stored in buckets and lifted by

crane on furnace platform and scrap charged in induction furnace by manually. Besides charging

of scraps into furnace it also handles other operation like removal of ingots moulds, removal of

S.S Ingots etc.

Induction of Furnace

An induction furnace is highly sophisticated equipment consisting of a crucible with a lid. Heat

is generated by the induction of medium frequency electricity. The furnace is equipped with the

necessary control panel, which receives electrical power at normal 50Hz frequency and converts

the same to DC power. The DC power generated is again converted to AC power of medium

frequency, which induces the heating effect to the furnace. In addition to the control panel, the

entire furnace system is thoroughly cooled for protection. A separate water supply system along

with cooling tower is installed to feed the furnace continuously with demineralised cool water.

The furnace can also be titled to pour out the molten metal. The inside surface of the crucible in

normally coated with castable ceramics and fire clay in intervals of 6 to 7 days. This protects the

crucible and gives a longer life to the furnace.

Melting Process

The furnace crucible is charged with the requisite quantity of scrap and the lid is put on. Power

introduced and the furnace gets hot and the steel starts to melt. Heating is continued till the entire

metal mass metal to liquid state. At this stage, a little time is available for adding inclusions like

ferro alloys and carbon, if necessary. A sample of molten metal is sent to the laboratories for

quality check-up and analysis. Based on the analysis report, ferro alloys and other alloys

materials are added after proper weightment. The temperature of the metal bath will be adjusted

suitably by adjusting power into the furnace to ensure proper mixing of alloys in the bath. After

sometime, when the metal bath has reached the appropriate temperature, sample is send to the

laboratories and the process is repeated till the desired is quality is obtained. The molten metal is

now ready for pouring into the moulds.


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Casting of S.S. Ingots

The methodology of casting Ingots is called uphill top and bottom pouring. The advantage is that

simultaneously depending on the capacity a number of ingots can be cast. Prepared and set

moulds will be kept in casting area in proper sequence. The molten metal is poured through a

central shaft and is allowed to rise through the ingot moulds through a series of channels. By

this method, solid non-porous casting can be achieved and the weight of the molten metal ends

any possibility of blowholes. Some of the equipments used in arranging a set of moulds are

Base Plate or Bottom Plate & B.P. Sets

Bottom plate is a heavy C.I. Plate, the size of which varies depending on the number of ingots to

be cast which on its part depends on the furnace capacity. The bottom plate has groves to fit in

ceramic material made boxed called B.P sets are so places inside the grooves of the bottom plate

that they are inter connected to one another between the B.P sets are filled by ceramics bricks.

The entire system is called a B.P set Unit. The Ingot bould are kept on the upper opening of the

B.P. sets and the whole system is sealed by means of castable ceramics, fire clay and ramming

mass. One central hole of larger dia is kept open to receive the molten metal.

CastingA long pouring pipe with ceramic sleeves inside is kept on the central opening of a B.P set

and sealed. The molten metal is poured into the system through this central shaft. Molten metal

passes through the central shaft into the B.P sets and next to the ingot moulds. The level of metal

rises inside the moulds till the charge is exhausted. The metal is allowed to cool for a few

minutes and then the ingot moulds are lifted away by the E.O.T Crane. Next the entire B.P. set is

also removed with the Ingots sticking out, to the finishing yard. Now the Ingots, Runner &

Risers are removed for sale.

Quality Control:

Input Of Raw Materials:

The main inputs required for operation of the induction furnace are S.S. Scrap of 202 Grade, 304


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Grade, 316 Grade etc. The Plant is located at 127/3, Chhatral-Kadi Road, Near Gopal Weigh

Bridge, At-Dhanot, Taluka-Kalol, Dist-Gandhinagar, Gujarat, India. Scrap will be purchased

from open Market i.e. Scrap from Wholesalers.

Quality Control is essential in developing the product of desired quality. This factor can be

broadly classified as follows :

Testing Of Raw Material

This ensures that the raw material used is of desired composition and of desired

quantity. This will definitely save melting cycle.

Testing Of Liquid Metal

This liquid metal will be tested for accurate composition while still in furnace. An

optical pyrometer is installed to check that the steel is being tapped at the correct

temperature.

Testing of Final Product

The output is finally inspected to verify conformation to the customer need &

requirements.

S S Ingots are sold to secondary manufacturers who cast them further, it is marketed to basically

Utensils Manufacturers, Since India is a low cost manufacturer lot of this SS ingots

manufacturing companies export their product.

On Discussion with Mr. Ronak M Barot Managing Director of Virat Alloys pvt. Ltd , they

mainly target utensil manufacturers for their product , their clients majorly concentrate in

Mumbai and Delhi and also in various parts of the countries , Apart from their manufacturing of

S S ingots they manufacture Flat sheets in their jodhpur facility.


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When asked about marketing strategies adopted by them , they revealed they have been doing

business with their clients ever since they started operating , he regarded it as total play of

relationships in the business which is a result of good quality product at competitive pricing ,

when asked about expansion plans they have signed a MOU with Gujrat Government and they

are building a world class facility in kalol near Ahmedabad which will help them to scale up

their operations.

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