Internship Report

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Batala Steels

TABLE OF CONTENTS

Serial # Description Page#

01 Executive

Summary

03

02 Industry profile 04

03 Analysis of steel

industry

05

04 Vision 09

05 Mission 10

06 Quality policy 11

07 Testing facility 12

08 Process 14

09 Hierarchy and

Departments

17

10 Administration and

personnel

Department

18

11 Marketing

Department

20

12 Accounts

Department

24

13 Strengths 26

14 Weaknesses 27

15 Opportunities 28

16 Threats 29

University of Central Punjab, PCBA-PICS

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17 Plausible Problems 30

18 Reccomendations 32

19 Conclusion 33

20 Bibliography 34


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EXECUTIVE SUMMARY

Prior to detailed description, I am stating the summary of internship report. Basic

purpose behind this is to give a clear view of the efforts that have been taken to

complete the program.I was assigned to work in Batala steels as internee for the

practical exposure. My job was started on 08 NOV, 2010 till Dec 28,2010 with aim

to study each and every aspect of organizational setup, departmental working,

working process and the documentation proceed by the organization.I being the

BBA student was deputed in Administration and personnel department.The report

in hand consists of my six weeks experience during internship. The report starts

with introduction of the organization,which covers detailed history and

background,and products downstream industry, organizational structure and some

other important aspects. After there are functions performed by different

departments working in the organization.As we all are aware that development and

growth of any country is largely dependent upon the iron and steel industry. So the

improvements and development of that industry is of much importance for any

country and especially the developing countries like Pakistan. Although,Batala

steel is working well in this current political and economic unstable environment

but still there is room for improvement.


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INDUSTRY PROFILE:

Most Pakistanis do not realize that a Steel Mill is actually more essential than a nuclear

plant, or a missile. A steel mill is the backbone of the infrastructure of any country. Whether

it is roads, bridges, or sugar mills, everything comes from a steel mill.

After independence in 1947, it did not take long for Pakistan to come to the realization that

progressive industrial and economical development would be impossible without the

possession of a self reliant iron and steel making plant. The dependence on imports would

cause serious setbacks to the country along with an extortionately high import bill which

would be impossible to support.

Unfortunately Pakistan could not get a steel mill from 1947-1973. Most powers would not

sell the technology that could undermine the industrial prowess as well as the export

capability of Western enterprise.

The initial idea for a domestic iron and steel mill was put forward in the first five year plan of

Pakistan (1955 - 1960). Debates over the manufacturing process, supply sources of the

requisite machinery and raw materials, plant site, domestic ore versus imported ore,

ownership pattern, product mix and above all foreign financing credit kept the project onhold

for a considerable time.

The steel industry is often considered to be an indicator of economic progress, because of

the critical role played by steel in infrastructural and overall economic development. The

volume of steel consumed has been the barometer for measuring development and

economic progress. Whether it is construction or industrial goods, steel is the basic raw

material. However with the advancement in technology, lighter metals and stronger alloys

have been developed. Plastics and synthetics have replaced steel in many areas.

Still, “Steel” today is one of the most common materials in the world, with more than 1300

million tons produced annually. It is a major component in buildings, infrastructure,

tools,ships, automobiles, machines, appliances, and weapons.

The ores used in making iron and steel are iron oxides, which are compounds of iron and

oxygen. The major iron oxide ores are


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Batala Steels

A Brief Analysis of the Steel Industry in Pakistan:

Hematite, which is the most plentiful

Limonite, also called brown ore

Taconite

Magnetite, a black ore

The three raw materials used in making pig iron (which is the raw material needed to make

steel) are the processed iron ore, coke (residue left after heating coal in the absence of air,

generally containing up to 90% carbon) and limestone (CaCO3) or burnt lime (CaO), which

are added to the blast furnace at intervals, making the process continuous. The limestone or

burnt lime is used as a fluxing material that forms a slag on top of the liquid metal. This has

an oxidizing effect on the liquid metal underneath which helps to remove impurities.

Approximately two tons of ore, one ton of coke, and a half ton of limestone are required to

produce one ton of iron.

There are several basic elements which can be found in all

commercial steels:

Carbon is a very important element in steel since it allows the steel to be hardened

by heat treatment. Only a small amount of carbon is needed to produce steel: up to

0.25% for low carbon steel, 0.25-0.50% for medium carbon steel, and 0.50-1.25% for

high carbon steel. Steel can contain up to 2% carbon, but over that amount it is

considered to be cast iron, in which the excess carbon forms graphite.

The metal manganese is used in small amounts (0.03-1.0%) to remove unwanted

oxygen and to control sulfur. Sulfur is difficult to remove from steel and the form it

takes in steel (iron sulfide, FeS) allows the steel to become brittle, or hot-short, when

forged or rolled at elevated temperatures. Sulfur content in commercial steels is

usually kept below 0.05%.

A small quantity of phosphorus (usually below 0.04%) is present, which tends to

dissolve in the iron, slightly increasing the strength and hardness. Phosphorus in

larger quantities reduces the ductility or formability of steel and can cause the

material to crack when cold worked in a rolling mill, making it cold-short.

Silicon is another element present in steel, usually between 0.5-0.3percent. The

silicon dissolves in the iron and increases the strength and toughness of the steel


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without greatly reducing ductility. The silicon also deoxidizes the molten steel

through the formation of silicon dioxide (SiO2), which makes for stronger, less porous

castings.

Types of Steel Mills:

INTEGRATED MILL:

Integrated mills are large facilities that are typically only economical to build in

2,000,000 ton per year annual capacity and up. Final products made by an integrated

plant are usually large structural sections, heavy plate, strip, wire rod, railway rails,

and occasionally long products such as bars and pipe.

A Brief Analysis of the Steel Industry in Pakistan

An integrated steel mill has all the functions for primary steel production:

Iron Making (conversion of ore to liquid iron),

Steelmaking (conversion of pig iron to liquid steel),

Casting (solidification of the liquid steel),

Roughing Rolling/Billet Rolling (reducing size of blocks)

Product Rolling (finished shapes).

Because of the energy cost and structural stress associated with heating and cooling a blast

furnace, typically these primary steelmaking vessels will operate on a continuous production

campaign of several years duration. Even during periods of low steel demand, it may not be

feasible to let the blast furnace grow cold. Due to the large employment of integrated

plants, often governments will financially assist an obsolescent facility rather than take the

risk of having thousands of workers thrown out of jobs.


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MINI MILL:

A mini-mill is traditionally a secondary steel producer. Usually it obtains most of its

iron from scrap steel, recycled from used automobiles and equipment or byproducts

of manufacturing.

A typical mini-mill will have an electric arc furnace for scrap melting, a ladle furnace or

vacuum furnace for precision control of chemistry, a strip or billet continuous caster for

converting molten steel to solid form, a reheat furnace and a rolling mill.

Often a mini-mill will be constructed in an area with no other steel production, to take

advantage of local resources and lower-cost labor. Mini-mill plants may specialize, for

example, making coils of rod for wire-drawing use, or pipe, or in special sections for

transportation and agriculture.

Capacities of mini-mills vary; some plants may make as much as 3,000,000 tons per year, a

typical size is in the range 200,000 to 400,000 tons per year, and some old or specialty

plants may make as little as 50,000 tons per year of finished product. Since the

electric arc furnace can be easily started and stopped on a regular basis, mini-mills

can follow the market demand for their products easily, operating on 24 hour

schedules when demand is high and cutting back production when sales are lower.

Another element that plays an important part in the processing of steel is oxygen.

Some large steel mills have installed their own oxygen plants, which are located near

basic oxygen furnaces. Oxygen injected into the mix or furnace "charge" improves

and speeds up steel production.

Steel can be given many different and useful properties by alloying the iron with

other metals such as chromium, molybdenum, nickel, aluminum, cobalt, tungsten,

vanadium, and titanium, and with nonmetals such as boron and silicon.


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Batala Steels

The steel industry in Pakistan comprises the following:

Steel Melters: this segment, re-melts both imported as well as locally

generated scrap to largely produce cast billets and thin ingots; total installed

capacity of this segment is estimated at 2.0mtpa.

Steel Re-rollers: this segment largely comprising manually operated cross-

country mills that use billets, thin ingots, slabs and rollable materials to

make rebars and steel sections; total installed capacity of this segment is

estimated at 3.2mtpa.

Ship Demolition Industry: this segment supplies re-rollable / remeltable

scrap, using relatively obsolete demolition technology; current output is

estimated at 0.2mtpa.

It can't be denied in the modern times that an overall development of a country

depends to a greater extent on Iron and Steel Industry because we are passing

through the 'Steel Age', where right from a sewing needle to aircraft all the goods

require iron and steel to come into being. Iron and steel is indispensable to use for

making machines, tools, war items and other various goods of daily life.Rail tracks,

rail bogies, aero-planes, ships, motor cars, bridge dams, tunnels and pipe lines

required iron and steel.

Significance of iron and steel could be accessed through the following facts:

a) Fast, modern and cheap means of transport play decisive role in the economic

development of a country. For this purpose, rails, ships, aero planes, motor vehicles

etc.

b) If the supply of consumer’s goods are abundant in a country, it is the symptom

that the country is self sufficient and does not depend on others. The consumer’s

goods are made on machines which are made of iron and steel.

In the light of this discussion, it could confidently be concluded that if a country is

deficient in iron and steel,it should not dream for the economic development.


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Vision

As our forefathers laid down a foundation of solid business practices upon which to build a

future for generations to come, our vision at batala steel is principled in the same way.

When this nation was born, Batala Steel was an inherent factor in development of

infrastructure and transportation, helping bridge the new nation and keep it together as a

single cohesive unit.

In the 21st century, Batala Steel sees itself as the foundation of all rural development in

Pakistan. As our nations' furthest recesses continue to industrialize and mature, Batala Steel

finds itself at the core of all the upcoming groundbreaking development.

Batala Steel is committed to the prosperity and growth of this nation and as such will lend

itself to further that commitment. Generations of the Batala Steel Corporate Family will stand

buy and build this nation to greatness.

Batala products:


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Batala Steels

Mission Statement

At Batala Steel our top priority has always been the manufacturing of a top quality product

that meets international standards, giving the label "Made in Pakistan" the honor and dignity

that is commands. We pride ourselves on the production of an excellent steel product that is

unmatched in Pakistan, a product that is favoured by our loyal customers in Pakistan and

across the world.

With trainings and seminars to keep our employees at par with international industry

standards, and competitive pricing to stay competitive with the market, our aim for the future

is to make sure that Batala Steel remains a front-runner in the steel industry.

Greater response to customer's present & future needs.

Focus on productivity and Quality.

Facing Challenges of free Market Economy.

Ensuring higher rate of return on invested capital.

Developing Human resource and motivating employees through

empowerment and hard consequences.

Safe Working and Environment friendly conditions.

Minimizing process wastages, rejections and recycling .wastes.

Good Governance.

Fulfilling Social Obligations.

Improving Corporate Image.

We at BATALA STEEL believe that Quality is not just a manufacturing specification

but it is something which is to be internalized. We measure customer satisfaction above

all and endeavor to achieve it by maintaining the quality standards in products we

deliver.

For this we have a well equipped quality lab with latest testing facilities. We conduct

various chemical and mechanical tests to ensure the required specification. The testing

is done under our proficient and diligence staff. The quality department promptly

reports the feedback to the production department and thus ensures that every single


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product produced is of top quality.

Quality Policy

The Company is committed to:

Ensure maximum customer satisfaction by maintaining the consistency in

quality.

Respond innovatively and competitively to the changing needs of our customers

through persistently adapting new technologies with the same excellence.

Fulfill its legal and statutory obligations and international standards.

Involve manufacturing processes that are environment friendly

We at Batala Steel, strictly adhere to the ASTM and BSI international standards. For

this purpose we have established most modern laboratories to maintain the highest

quality precision standard. The perfection of our work has captured the sharp eyes of

discerning clients, in the public and private sector including some of the top

multinational construction firms. To produce high quality steel according to the requires

specification, Batala Steel is equipped with both chemical and physical laboratories at

our site in lahore. Prime Quality M.S billets are processed through semi-automatic re-

rolling plants, which are designed to manufacture standardized products of exact and

international specifications; special attention is paid to the custom requirements

instruction of each particular client. Beside these we have potential to meet special

requirements of our customers.


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Testing Facilities:

The physical testing laboratory at batala steel is equipped with modern testing

equipment,well maintained and regularly calibrated by reputed agencies including

Engineering University Lahore. The laboratory is capable of performing several requisite

tests on mild steel manufactured. Frequent tests are performed for each heat / lot on in-

coming, in-process and final dispatch stage.Apart from the usual physical testing

laboratory, batala steel is the only steel industry in Pakistan to have the chemical testing

facilities through most advanced but expensive - Spectrolab. This enables the company

to apply comprehensive quality control measures at input, in process and final stage.

Installed with latest and modern testing equipment, chemical and physical testing

laboratories of batala steel are taken at par with any internationally recognized testing

laboratory


http://www.batalasteel.com/images/sll2.jpg


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Batala Steels

PRODUCTION PROCESS OVERVIEW

A brief overview of the production process at Batala steels is as follows:

Raw Materials:Main raw materials used are fine iron ore, lump iron

ore, sinters, coke (which is made in house in the coke oven batteries),

and fluxes (i.e. limestone, dolomite, quartzite, fireclays, etc).

Currently Batala steels, imports 100% of it iron ore and coal

requirements, whereas fluxes are procured locally.

Melting:Raw materials are charged in the blast furnace where hot air

and a calculated quantity of natural gas is pumped to melt the iron

and fluxes. The molten metal from this process is further refined to

make steel. Other outputs from this process include pig iron (which

is a solidified state of the molten metal) and slag (which is a mixture

of fluxes and foreign matter from ore, and is used in the

manufacturing of cement).

Steel Making:Molten metal from the blast furnace is taken to the

steel making plant where further reduction of impurities is done in an

oxygen furnace (Linz Donawitz converters). The crude steel in liquid

form is taken in a ladle for further refining, where ferroalloys are

added to the liquid steel.

Casting:Batala steel employs continuous casting technology to cast

the liquid steel into semi-finished products (i.e. cast billets, blooms

and slabs). Cast billets are sold without any further processing

whereas blooms and the slabs are further processed at the Billet Mill

and the Hot Strip Mill respectively.

Finishing:Semi-finished products such as blooms and slabs are

reheated at high temperatures in the reheating furnaces to make the

metal malleable and then rolled into finished products at the rolling

mills. Batala steels, currently has a Billet Mill, a Hot Strip Mill and a

Cold Rolling Mill.


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Chairman

Board of directors

Administration and personnel department

Marketing department Accounts department

Batala Steels

Organization Hierarchy:


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DEPARTMENTS:

Administration and personnel Department

Marketing Department

Accounts department

Administration and personnel department :

This department is responsible for overall administrative and personnel matters in

accordance with the policies, rules and regulations including welfare of employees.

The following are the various section of A & P Department.

A. Personnel ‘A’ Section :

This section deals with maintenance of personal files of all officers including the

personal files of the officers of those departments who have not been delegated the

administrative powers.

B. Leave and complaint Section :

This section deals with maintenance of leave records of all the Officers and

workers and issues leave advices of the officers from all levels including of

those departments who have not been given authority.

C. P & C Section :

Policy and Coordination section is the main part of A&P department


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where policies and rules and regulations of officers & workers maintained.

All management policies are implemented in batala steel through this section.

It also deals with top management cases as well as routine matters.

D. Enquiry Cell :

Enquiry cell deals with initiating necessary disciplinary actions

against the officers involved in misconduct corruption cases, carrying out

investigation and examination of enquiry reports of the completion of

disciplinary cases as per Batala steel officers service rules and

regulations.

E. Dues Settlement and Verification Cell :

This cell is established to facilitate the ex-employees as well as

dependents of deceased employees for settlement of their final dues

through accounts departments / provident fund gratuity fund.

F: Recruitment and selection section:

This section deals with the recriutment and selection process of new employees.

Quality Policy of Administration & Personnel

Administration and Personnel department commits to:


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Manage and care the employees for better productivity, organizational

growth.

Appropriate staffing according to work requirements.

Maintain quality of work life.

Strive for corporate culture improvement.

Marketing Department:

The function of Marketing Department is to optimize the sale revenue in

order to achieve the organizational objectives by adopting affective Marketing

system to sell Batala steel main products and by-products at the best

achievable competitive prices.

To achieve targeted sales directed towards attaining organizational

objectives, a board based sales policy is adopted which provides the guideline

for the Marketing department as well as the customers. The sales policy, by

implementing the standard terms and conditions of sales contracts safeguards

the interests of Batala steel as well as its customers in a balanced way.

Customers i.e. traders and consumers (especially industrial consumers) play a

pivotal role in the sale of Batala steel products.


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Batala Steels

Preparation of Sales Policy:

The sales policy of Batala Steel is prepared with immense care and

vigor on the basis of past experience and achievements keeping in view the

customers demand and market conditions. It reflects the plus points of the

previous Sales policies and maturity of policy makers. Sales policy is the result

of hectic efforts of marketing personnel who carryout in depth survey/study of

the market and keep vigilant eyes on the changing domestic as well as

international Iron & Steel markets. While making the sales policy, due care is

taken to the future need of BATALA Steel and its relations with its

customers.Sales policy is placed before the Price Fixation and implemented after

due approval.

Pricing:

The prices of Pakistan steel products are fixed by a price Fixation/review

committee comprising:

Chairman

Director (Marketing)

Since the production of BATALA steel products are based on imported raw

materials, the prices are subject to change without notice. While reviewing the

prices of products, following factors are taken into consideration:

Market conditions

Market Acceptance

Protection against imports

Competitors


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Landed cost of imported materials

Government fiscal policies

Production & Quality range

Cost of production

Dealership section:

This section is assigned following jobs:

Entertain various dealership applications.

Point out deficiencies in respect of each application.

Maintain close liaison with Sales Accounts department for the issuance of

official receipts of security amount received on account of dealership.

Maintain up-to-date record of Traders & consumers/Dealers.

Reply the queries received from customers, Government agencies Internal

and External Auditors and Ministry of Industries and Production.

Market intelligence

i. Study various steel Journals and Newspapers to find out useful

data, information related to Iron and Steel Industries, their

gradual development and Marketing strategies.

ii. Determine demand of Iron and Steel products in the domestic

as well as international markets and fluctuation of prices thereof.

iii. Find out prospective/new buyers of Iron and Steel products.

iv. Keep record of international prices.

v. Keep track history of prices of Batala steel products.

vi. Keep record of domestic prices of Iron & Steel products.

vii. Keep record of ITP (Import Trade Price) value.


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viii. Determination of landed cost of international prices.

ix. Submit papers/materials for review meeting.

Data coordination Section:

This section perform the following functions

Maintain up-to-date record of stocks.

Maintain up-to-date record of commercial dispatches of Batala Steel

products.

Maintain the price history of BATALA Steel products.

Maintain up-to-date dealership list.

Administration section:

This section is responsible for overall administrative functions of marketing

department and to perform following jobs:

Maintain the personal files in respect of officers, Staff, Retainer and Daily

wage Workers.

Prepare the daily attendance.

Prepare the monthly attendance of Officers Staff, Retainers and Daily wage

Workers.

Liaise with Central administration in connection with issue of leave advice

leave balance and other administrative matters.

Look after the general maintenance of sale department i.e. Lighting,

Electric Fans, Air conditioners, White wash, Fixture and Fitting etc. Take

care, of the stationary requirement of entire Sales department.


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Batala Steels

The Accounts department:

Accounts department is working under the supervision of Director Accounts.The

accounts section of any organization is called the base point for the provision of

data. This department basically works for the preparation of financial statements of

the corporation, disbursement of the salary to employees. Payments to suppliers/

contractors/ service provider and cash management. All financial transactions are

recorded, summarized and consolidated in accounts department in form of:

A. Journals B. Ledgers C. Trial Balance D. Income statement E. Balance sheet

The department is divided to three sections for its smooth working those are:

1) Final Accounts

The main function of this section as appears from its name is to

finalize annual accounts of BATALA steel. In addition to finalization of

annual accounts, monthly and quarterly are also compiled provisionally.

However few working groups in this section carry out other functions like


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maintenance of fixed assets. Annual finalization of accounts is very

important because annual audit is based on the accounts for the year.

Final account section coordinates with external auditors to complete

statuary audit within stipulated time specified by the securities.

Following books of accounts are maintained by final account section.

General ledger

Trial Balance

Financial Statement

Balance Sheet

Cash flow statement

2) Bills Section

This section handle the all payment which are made by the

Batala steel to the contractors, dealers, suppliers, service provider,

transportation charges.

3) Cash section

Cash section management starts when order for purchase of raw material

or other goods is placed and ends when payment is realized from sales. All

these activities between these events fall when within the realm of cash

management. Cash management is the process whereby the cash inflows and

outflows are balanced so that current obligation is met in time and any excess

cash is invested to earn income. It also includes ability to obtain credit so that

the corporation can have access to cash to finance temporary cash deficits.

Rules and Regulations of Cash Section


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Batala Steels

The function of handling receipts and payments is completely separated

under cash section.

All transaction of receipts and payments are accounted for in the books by

other concerned department.

All disbursement is made by cheques on the instruction of dealing

department.

Cheques are signed on the basis of approved invoices and vouchers.

Cheques are counter signed by the person outside cash section.

After preparation of cheques supporting documents are endorsed for this

effect.

Daily report of receipt, disbursement and balances available in the banks is

prepared. Cumulative receipts and payments for the month are also shown.

STRENGTHS

Pakistan defense industry is relying mostly on domestic steel industry

which is a major buyer of steel.

Cheap labor

Batala steel has made arrangement for its scientific quality control test at

every stage of production to maintain the high quality of its products.

Batala steel has mainframe computer to keep the record of whole type of

data and other informations about Pakistan Steel products.

Batala steel has received ISO 9001 (quality certificate) ISO

14001(certification of environmental science management system).

Batala steel possess number of achievements which serve as their

competitive advantge like prime minister trophy 2008 , Buisness man of the

year 2009, best achievement 2005, LCCI achievement award 2007, lesco

valued customer award.


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WEAKNESSES

Limited Capacity to fulfill demand.

Declining Skilled work force.

Batala steel has no efficient research and development department which is

key to product innovation and process innovation.

Capital repair has not been made from last many years, which affect the

quality of products and speed of production.

Batala steel has highly centralized system of decision making, due to this

delay in work does occur. Lengthy procedure and too much documents

resulted in delays of many urgent in many urgent policies to implement.

Too many departments of batala steel contributing very less profit to batala

Steel, as compare to the cost.

Labor productivity in Batala is low because of workers dissatisfaction.


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Batala Steels

Lack of R&D investment.

Dependence on imports for steel manufacturing equipments and

technology.

Price of domestic steel is dependant on international markets..

Machinery is old and needs repairs and upgrades.

OPPORTUNITIES

Abundant Coal available to Steel Mills.

Abundant Iron ore Available domestically.

Increase in prices and demand of steel world wide.s

The large iron ore and coal reserve of Pakistan provide good opportunity in

the steel sector for enterprising investors.

The Engineering and Development Board (EDB) of the ministry of

industries and production has evolved the long term ‘National Steel Policy’

with a view to cover the widening demand and supply gap by achieving a

production target of 15 million tonness of steel by 2020.


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Batala Steels

Pakistan to shift its focus from textile & agriculture to heavy industries.

( heavy industries 60 % of world trade) vision 2030.

Kalabagh and Chiniot have known deposits of iron ore that have not yet

been excavated and utilized by the local steel industry, as importing iron

ore, iron and steel scrap was cheaper than mining local ore a capital-

intensive venture. With global steel and iron ore prices skyrocketing there

is hope that both International and domestic steel makers have finally

decided to excavate and exploit local reserves.

THREATS

High tax.

Political Instability.

Slow growth in infrastructure development.

Possibilities of export growth from China.

Increased vulnerability to international market trends.

Increase in World iron ore prices.


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The prices of steel industry have sharply increased as the current energy

shortage in the country has almost stopped production at steel furnaces.

This stoppage has led to reduced supplies of raw material like iron billets

and ingots to the steel re-rolling industry.

Energy crisis is biggest threat.During the last few days, the prices of T-iron

and iron belts increased by Rs3,000 to Rs5,000 per metric ton, reaching

Rs48,000 to Rs50,000 compared to previous Rs43,000 to Rs45,000.

Plausible problems:

PRICE is one of the biggest problem of this sector, As Pakistan import Iron

ores to make steel so as a rise in international prices the local prices also get

effected, international prices have raised about 200% due to which steel

prices were raised in Pakistan.

The rates of iron ore from which the steel was extracted in the steel mills

had increased sharply in past five years from $27.83 per tonne in 2002-03

to $73.45 per tonne in 2007-08. The current rates were above $85 per

tonne. The rates of billets that were the basic raw material for making steel


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products have increased from $360 per tonne in 2005 to $750 per tonne in

2007 and are still rising.

Two major things should be taken in consideration when determining the

prices as prices mostly depend on production & operating cost to produce

Steel, and the cost of Raw meterial

1) Energy source

2) Raw Material

ENERGY SOURCES

The prices T-iron, iron belts and other allied products of the steel industry

have sharply increased as the current energy shortage in the country has

almost stopped production at steel furnaces due to which production of steel

was dropped and demand was not fulfilled so prices went high because

High demand and low supply result in increase in prices.This stoppage has

led to reduced supplies of raw material like iron billets and ingots to the

steel re-rolling industry.

Electricity and gas-shedding triggering an increase in prices of steel

products because when downstream mills will be unable to produce steel as

a result,demand and supply would alter and hence High demand and low

supply result in increase in prices.

Batala steels uses national gas and electricity to run the mill and furnace,

if there will be energy crisis,they won’t be able to do the required

production which will result in not fulfilling the demand, and consequently

result in high prices due to shortage of supply with high demand of steel,

secondly the electricity is getting so expensive that because of operating

cost the price of steel are getting high, national gas is also getting

expensive, because national gas when used for commercial use is very

expensive as compared to used for household.


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In the re-rolling industry, a furnace takes a minimum of six hours to melt

billets and ingots, but breakdown of power supply restricts the furnace from

reaching the melting point. Once the furnace gets stopped due to power

suspension, it takes the same time again to restart and reach the melting

temperature which multiplies the production cost. On the other hand, the

raw material once put into the furnace could not be withdrawn till the

melting process is completed.Repeated melting of a raw material reduces

the quality of finished goods and increases the sales tax on the producers as

the tax is imposed depending on how many times a furnace is run ignoring

how many times asingle raw material is melted due to any circumstances.

This practice not only pushes up the cost of the re-rolling and melting

industry, but also enhances the ratio of wastage which is ultimately passed

on to the consumers.

Recommendations:

Improving Efficiency, Reducing Costs, and Increasing Overall

Competitiveness.

It is my recommendation that Batala steel should look forward to use

COAL as a source of energy because it will be more cheap as compared to

other sources.

Electric arc furnaces are a common method of reprocessing scrap metal to

create new steel, and this process does not need much electricity. This

process can also be used for converting pig iron to steel.

Focused research and development activities in collaboration with foreign

experts.

Development of Human capital.


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Batala Steels

As the Chinese are using Iron Ore with the properties similar to that of

Pakistani Ore, a visit of to Chinese Steel industry may also be arranged.

New Compensation plans should be designed in order to increase

Employees satisfaction level.

Conclusion:

During the course of my internship, I found that Batala steel was set up with an

objective to become market leader in the industry . Upto some extent it has been

successfully achieving this goal. Batala steel has a potential to grow and it can

capture bigger market share but unfortunately this big industrial unit is suffering

from various problems like employees dissatisfaction,lack of strategic direction,

weak financial position, and govt. positive attitude towards imports, due capital

repair, lack of cost control,corruption and inefficient use of resources. After

overcoming these problems, it can make its operations more efficient and can take

the advantage of expansion opportunity in order to exploit the future market for

iron and steel.


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Batala Steels

Bibliography:

http://www.nationsencyclopedia.com/Asia-and-Oceania/Pakistan-

INDUSTRY.html#ixzz0sn556kfD

http://www.arabianbusiness.com/591597-weak-gulf-steel-demand-

could-lead-to-oversupply

http://tribune.com.pk/story/13721/steel-industry-beset-with-problems-

despite-bright-prospects/

http://steelguru.com/interview/detail/132/

Making_Pakistan_steel_sector_strong.html

http://www.onepakistan.com/finance/news/pakistan-business-general-

news/4198-Year-end-review.html

http://www.fandmmag.com/web/online/Industry-News/Pakistan-

Proposes-to-Link-Domestic-Steel-Prices-with-International-Market-

Rates/1$3435

http://scrapnews.recycleinme.com/newsdetails-20.aspx


http://scrapnews.recycleinme.com/newsdetails-20.aspx

http://www.fandmmag.com/web/online/Industry-News/Pakistan-Proposes-to-Link-Domestic-Steel-Prices-with-International-Market-Rates/1$3435



http://www.onepakistan.com/finance/news/pakistan-business-general-news/4198-Year-end-review.html

http://www.onepakistan.com/finance/news/pakistan-business-general-news/4198-Year-end-review.html

http://steelguru.com/interview/detail/132/Making_Pakistan_steel_sector_strong.html

http://steelguru.com/interview/detail/132/Making_Pakistan_steel_sector_strong.html

http://tribune.com.pk/story/13721/steel-industry-beset-with-problems-despite-bright-prospects/

http://tribune.com.pk/story/13721/steel-industry-beset-with-problems-despite-bright-prospects/

http://www.arabianbusiness.com/591597-weak-gulf-steel-demand-could-lead-to-oversupply

http://www.arabianbusiness.com/591597-weak-gulf-steel-demand-could-lead-to-oversupply

http://www.nationsencyclopedia.com/Asia-and-Oceania/Pakistan-INDUSTRY.html#ixzz0sn556kfD

http://www.nationsencyclopedia.com/Asia-and-Oceania/Pakistan-INDUSTRY.html#ixzz0sn556kfD

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Batala Steels

http://steeltimesint.com/news/view/pakistan-has-the-potential-to-

increase-its-steel-production-to-16mt-y


http://steeltimesint.com/news/view/pakistan-has-the-potential-to-increase-its-steel-production-to-16mt-y

http://steeltimesint.com/news/view/pakistan-has-the-potential-to-increase-its-steel-production-to-16mt-y

Documents

Internship Report