Vardhman Steel

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AProject ReportON(Production process and Marketing Strategies)AS PARTIAL FULFILLMENT OF MBA PROGRAM, 1 year

SUBMITTED BY:(Balbir Syal)(MBA14E08)

PUNEBATCH (MBA) 2014 - 2016DECLARATION

I, Balbir Syal hereby declare that this project is the record of authenticWork carried out by me during the period from 15th Dec 2014 to 15th Jan 2015 andHas not been submitted earlier to any university or institute for the award of anyDegree /diploma etc.

Name - Balbir SyalDate -

CERTIFICATE

This is to certify that Mr. Balbir Syal has completed WIP under my guidance.

Date of submission: ______________________.

Signature:(Internal Guide)

ACKNOWLEDGEMENT

This project has been an honest and dedicated attempt to make the analysis onMarketing material as authentic as it could. And I earnestly hope that it providesUseful and workable information and knowledge to any person reading it.

During this period, I had the pleasure of working closely with accomplishedOrganization people who shared with me their experience and helped me inCompletion of my research.

I express my sincere thanks to my project guides and my institute faculty for guidingMe.

Lastly I am grateful to my parents who have been my mentors and motivators. IAm so thankful to all my batch mates who have been directly or indirectly involvedIn successful completion of this project.

Introduction of Steel

Steelis analloyofironandcarbonthat is widely used in construction and other applications because of its hightensile strengthand low cost.

Further refinements in the process, such asbasic oxygen steel making(BOS), largely replaced earlier methods by further lowering the cost of production and increasing the quality of the metal. Today, steel is one of the most common materials in the world, with more than 1.3 billion tons produced annually. It is a major component in buildings, infrastructure, tools, ships,automobiles, machines, appliances, and weapons. Modern steel is generally identified by various grades defined by assortedstandards organizations.

Related Materials

The carbon content of steel is between 0.002% and 2.1% by weight for plain iron-carbon alloys. These values vary depending onalloying elementssuch asmanganese, chromium,nickel, and so on. Too little carbon content leaves (pure) iron quite soft, ductile, and weak. Carbon contents higher than those of steel make an alloy commonly calledpig ironthat is brittle and not malleable.Alloy steelis steel to which additional alloying elements have been intentionally added to modify the characteristics of steel. Common alloying elements include: manganese,nickel,chromium,molybdenum,boron,titanium,vanadium, andniobium. Additional elements may be present in steel:manganese,phosphorus,sulfur,silicon, and traces ofoxygen, nitrogen, andaluminum.

Steel Production

When iron is smelted from its ore, it contains more carbon than is desirable. To become steel, it must be reprocessed to reduce the carbon to the correct amount, at which point other elements can be added. In modern facilities, this liquid is thencontinuously cast into long slabs orcastintoingots. Approximately 96% of steel is continuously cast, while only 4% is produced as ingots.The ingots are then heated in a soaking pit andhot rolledinto slabs,blooms, orbillets. Slabs are hot orcold rolledintosheet metalor plates. Billets are hot or cold rolled into bars, rods, and wire. Blooms are hot or cold rolled intostructural steel, such asI-beamsand rails. In modern steel mills these processes often occur in oneassembly line, with ore coming in and finished steel coming out. Sometimes after steels final rolling it is heat treated for strength, however this is relatively rare.

Steel industry

It is common today to talk about "the iron and steel industry" as if it was a single entity, but historically they were separate products. The steel industry is often considered an indicator of economic progress, because of the critical role played by steel in infrastructural and overalleconomic development.In 1980, there were more than 500,000 U.S. steelworkers. By 2000, the number of steelworkers fell to 224,000.Theeconomic boominChinaandIndiahas caused a massive increase in the demand for steel in recent years. Between 2000 and 2005, world steel demand increased by 6%. Since 2000, several Indian and Chinese steel firms have risen to prominence likeTata Steel(which boughtCorus Groupin 2007),Shanghai Baosteel Group Corporation andShagang Group.Arcelor Mittalis however the world'slargest steel producer.In 2005, theBritish Geological Surveystated China was the top steel producer with about one-third of the world share; Japan, Russia, and the US followed respectively.In 2008, steel begantrading as a commodityon theLondon Metal Exchange. At the end of 2008, the steel industry faced a sharp downturn that led to many cut-backs.The world steel industry peaked in 2007. That year,ThyssenKruppspent $12 billion to build the two most modern mills in the world, inCalvert, AlabamaandSepetiba,Rio de Janeiro, Brazil. The worldwideGreat Recessionstarting in 2008, however, sharply lowered demand and new construction, and so prices fell. ThyssenKrupp lost $11 billion on its two new plants, which sold steel below the cost of production. Finally in 2013, ThyssenKrupp offered the plants for sale at under $4 billion.

Recycling

Steel is one of the world's most-recycled materials, with a recycling rate of over 60% globally;in the United States alone, over 82,000,000 metric tons (81,000,000 long tons) was recycled in the year 2008, for an overall recycling rate of 83%.

Global Scenario In 2013 the world crude steel production reached 1606 million tons (mt) and showed a growth of 3% over 2012. (Source: World Steel Association or WSA) China remained the worlds largest crude steel producer in 2013 (779 mt) followed by Japan (111 mt), the USA (87 mt) and India (81 mt) at the 4th position. WSA has projected Indian steel demand to grow by 3.3% in 2014 as compared to global steel use growth of 3% and Chinese growth of 3.1%. For 2015, further recovery is projected for world (3.3%) and India (4.5%) and a slowing down for China (2.7%). Per capita finished steel consumption in 2013 is estimated at 225 kg for world and 515 kg for China.

Domestic Scenario The Indian steel industry has entered into a new development stage from 2007-08, riding high on the resurgent economy and rising demand for steel. Rapid rise in production has resulted in India becoming the 4th largest producer of crude steel and the largest producer of sponge iron or DRI in the world. At the time of its release, the National Steel Policy 2005 had envisaged steel production to reach 110 million tons by 2019-20. The National Steel Policy 2005 is currently being reviewed keeping in mind the rapid developments in the domestic steel industry (both on the supply and demand sides) as well as the stable growth of the Indian economy since the release of the Policy in 2005.

Production

Steel industry was delicensed and decontrolled in 1991 & 1992 respectively. Today, India is the 4th largest crude steel producer of steel in the world. In 2013-14, production for sale of total finished steel (alloy + non alloy) was 87.67 mt. Production for sale of Pig Iron in 2013-14 was 7.95 mt. India is the largest producer of sponge iron in the world with the coal based route accounting for 88% of total sponge iron production in the country. Last five year's production for sale of pig iron, sponge iron and total finished steel (alloy + non-alloy) are given below:

Indian steel industry : Production for Sale (in million tons)

Category2009-102010-112011-122012-132013-14

Pig Iron5.885.685.3716.8707.950

Sponge Iron24.3325.0819.6314.3318.20

Total Finished Steel (alloy + non alloy)60.6268.6275.7081.6887.67

Source: Joint Plant Committee

Demand - Availability Projection Demand Availability of iron and steel in the country is projected by Ministry of Steel in its Five Yearly Plan documents. Gaps in availability are met mostly through imports. Interface with consumers by way of a Steel Consumers Council exists, which is conducted on regular basis. Interface helps in redressing availability problems, complaints related to quality.

Steel Prices Price regulation of iron & steel was abolished on 16.1.1992. Since then steel prices are determined by the interplay of market forces. Domestic steel prices are influenced by trends in raw material prices, demand supply conditions in the market, international price trends among others. An Inter-Ministerial Group (IMG) is functioning in the Ministry of Steel, under the Chairmanship of Secretary (Steel) to monitor and coordinate major steel investments in the country. The Government earlier took various fiscal and other measures for stabilizing steel prices like significant reduction in import duties on steel, major raw materials, including mineral products and ores and concentrates in last few years. For ensuring quality of steel several items have been brought under a quality control order issued by the Government. Further, a Steel Price Monitoring Committee has been constituted by the Government with the aim to monitor price rationalization, analyze price fluctuations and advice all concerned regarding any irrational price behavior of steel commodity.

Imports & Exports

Imports Iron & steel are freely importable as per the extant policy. Last five years import of total finished steel (alloy + non alloy) is given below:

Indian steel industry : Imports (in million tons)

Category2009-102010-112011-122012-132013-14

Total Finished Steel (alloy + non alloy)7.386.666.867.935.45

Source: Joint Plant Committee