Vardhman Steel

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



Exports Iron & steel are freely exportable. Last five years export of total finished steel (alloy + non alloy) is given below:-

Indian steel industry : Exports (in million tons)

Category2009-102010-112011-122012-132013-14



Opportunities for growth of Iron and Steel in Private Sector

The New Industrial Policy RegimeThe New Industrial policy opened up the Indian iron and steel industry for private investment by (a) Removing it from the list of industries reserved for public sector and (b) Exempting it from compulsory licensing. Imports of foreign technology as well as foreign direct investment are now freely permitted up to certain limits under an automatic route. (c)Ministry of Steel plays the role of a facilitator, providing broad directions and assistance to new and existing steel plants, in the liberalized scenario.

The Growth Profile(i) Steel:The liberalization of industrial policy and other initiatives taken by the Government have given a definite impetus for entry, participation and growth of the private sector in the steel industry. While the existing units are being modernized/expanded, a large number of new steel plants have also come up in different parts of the country based on modern, cost effective, state of-the-art technologies. In the last few years, the rapid and stable growth of the demand side has also prompted domestic entrepreneurs to set up fresh Greenfield projects in different states of the country. Crude steel capacity was 102 mt in 2013-14 and India, the 4th largest producer of crude steel in the world, has to its credit, the capability to produce a variety of grades and that too, of international quality standards. The country is expected to become the 2nd largest producer of crude steel in the world by 2015-16, provided all requirements for creation of fresh capacity are adequately met.(ii) Pig Iron:India is also an important producer of pig iron.Post-liberalization, with setting up several units in the private sector, not only imports have drastically reduced but also India has turned out to be a net exporter of pig iron. The private sector accounted for 93% of total production for sale of pig iron in the country in 2013-14. The production for sale of pig iron has increased from 1.6 mt in 1991-92 to 7.95 mt in 2013-14.(iii) Sponge Iron:India is the worlds largest producer of sponge iron with a host of coal based units, located in the mineral-rich states of the country. Over the years, the coal based route has emerged as a key contributor and accounted for 88% of total sponge iron production in the country. Capacity in sponge iron making too has increased over the years and stands at around 45 mt.

Vardhman Special Steel LimitedOverview of Vardhman Company:-

The Beginning:

The story of Vardhman Special Steels Ltd. began back in theyear 1973with the commissioning ofOswal Steels at Faridabad, with aninitial capacity to produce 50,000 metric tonsof special & alloy steels.

The Turning Points:

The year 1986 was a major turning point in the history of Vardhman Special Steels Limited. The Company acquired another plant in Ludhiana, which was later upgraded to an installed capacity of 1, 00,000 metric tons per annum.

In 1995, VSSL (then known as VSS) installed an ultra-modern Steel Melting Shop comprising of a 30 ton UHP Electric Arc Furnace and a 9/6 meter Bloom Caster with Electromagnetic Stirrer.

In 2000, a Vacuum Degassing (V.D) System capable of reaching a vacuum of less than 1.0 mill bar was commissioned, further improving the already laudable manufacturing capabilities of the company. In 2001 Addition of Bright Bar Facility was added too.

2013 proved to be yet another dynamic year for VSSL. VSSL installed a rolling capacity of 1, 50,000 metric tons with complete automation, 33 TPH hearth type reheating furnace. Reversible 2 high shift able stand with bar manipulator. In the same year VSSL installed Magnaflux leakage testing system (Dr. Foerster Germany), and procured Ultrasonic Testing from (Olympus, Canada).

Contributor in Economic DevelopmentThe Vardhman Group, driven by faith in the economy development of the country, specifically in core industrial sector, ventured into the steel industry back in the year 1972. Since then, the company has exponentially expanded its operations on all fronts, attaining a capacity of 150,000 metric tons per annum producing high-grade hot rolled bars for varied applications.Placed among the leading producers of Special and Alloy Steels, Vardhman Special Steels Limited caters to diverse requirements of hot rolled bars for Engineering, Automotive, Tractor, Bearing and Allied Industries. The company, for more than 50 years, has emphasized on total customer focus in all operational areas, monitoring and nurturing relationships with all clients and business associates.

Vardhman Special Steels Limited incorporates some of the most advanced manufacturing facilities with equally reliable support facilities. The plant has well-conceived layout plan with modern material handling facilities-all designed for economic processing of materials and human skills. Vardhman ability to adopt changes in technology is evident in its extensive use of automation and contemporary concepts.Leveraging state-of-the-art manufacturing facilities and vast experience in the domain, the company has an extensive list of clientele, including various globally renowned corporations, such as General Motors, Hyundai Motors, Caterpillar, JCB, Siemens, Ashok Leyland, Honda, Suzuki, Yamaha, Piaggio Vehicles, and Lucas TVS, among various others.

Production Process of Vardhman Special Steel Limited.

Steps in Production of Steel

Raw Material

Iron ore Coke Chromium Silicon Nickel Carbon Nitrogen Manganese

UHP Electric Arc Furnace (30 tons)

The Electric Arc Furnace (EAF) uses only cold scrap metal. The process was originally used solely for making high quality steel, such as those used for machine tools and spring steel, as it gave more precise control over the composition. Today, however, it is also employed in making more widely used steels, including alloy andstainlessgrades as well as some special carbon and low-alloy steels. Modern electric arc furnaces can make up to 150 tons of steel in a single melt.The electric arc furnace consists of a circular bath with a movable roof, through which three graphite electrodes can be raised or lowered. At the start of the process, the electrodes are withdrawn and the roof swung clear. The steel scrap is then charged into the furnace from a large steel basket lowered from an overhead travelling crane. When charging is complete, the roof is swung back into position and the electrodes lowered into the furnace. A powerful electric current is passed through the charge, an arc is created, and the heat generated melts the scrap. Lime and fluorspar are added as fluxes and oxygen is blown into the melt. As a result, impurities in the metal combine to form a liquidslag.Samples of the steel are taken and analyzed to their check composition and, when the correct composition and temperature have been achieved, the furnace is tapped rapidly into a ladle. Final adjustments to precise customer specification can be made by adding alloys during tapping or, subsequently, in asecondary steel makingunit.

Ladle Refining Furnace

After tapping from electrical arc furnace, the ladle furnace is put on LF refining position.LF refining is conducted through arc heating and argon blowing. During this process, the steel deoxidization, desulfurization, the adjustment of steel temperature and chemical composition are completed. In primary slag, there is no vacuum function in LF, but room of vacuum device may be obligated in LF zone for future development. The ladle containing qualified liquid steel is hoisted to a ladle rotator of continuous casting machine and then it taps from the base of the receiving ladle to tundish, after that, it drops down into crystallizer to cast into bloom, which are severally straightening and cut to set dimensions and sent to a cooling bed through a roller table. It turns into qualified bloom.

Vacuum Degassing

Depending on the steel grades to be produced, various after treatment methods and process combinations can now-a-days be applied to modern steel making shops. For some grades of steel vacuum treatment has to be given to the steel to achieve strict quality parameters. Various processes have been developed using vacuum.VACUUM DEGASSING PROCESSES:Vacuum degassing is practiced in the steel industry for several purposes. They are: -a. to remove hydrogenb. to improve cleanliness by removing part of the oxygenc. To produce steel of low carbon content (< 0.03%)d. to produce steels to close chemical composition ranges (including deoxidizers), ande. To control pouring temperatures, especially for continuous casting operations.

Bloom Caster

Also in continuous casting of billets and especially also in case of blooms the secondary cooling system has an important role to play for the product quality and the productivity of the machine.It is common in most billet casting machines that full cone nozzles are installed in the roller gaps below the foot rollers where one nozzle on each side covers the total strand width so that only four nozzles are needed to cover the entire strand surface at one roller gap level.The particular nozzle flow rate depends on the location wherein the machine. Larger flow nozzles are used in the upper zones with decreasing nozzle flows further down in the machine.

MarketingThe Marketing department looks after the following various marketing activities, ensuring to accomplish the companys vision & mission goals. Brand development Feasibility studies Market research Latest market trends & technology for its products Competitor market studies Exploring new market Planning and implementing a marketing strategy Developing creative advertisement campaign and promotional literatures Selecting and canalizing advertisement campaign through various appropriate media Public relations activities Organizing exhibitions Seminars, etc.

Marketing strategies

Marketing strategyis the goal of increasing sales and achieving a sustainablecompetitive advantage. First of all they should to know their market competitor what they are doing n then after know their strategy price target market product. Marketing strategy includes all basic and long-term activities in the field of Vardhman as a Alloy steel company also use various marketing strategies to aware its customers and market about its product. The various marketing strategies which are using by the company are:

Exhibition & Trade faire Direct interaction with potential customers Hoardings on roads News paper Social networking Magazines

Customers of VSSL

Export of the Vardhman special steel products to the various countries

Thailand (unity powertrain Co. Ltd.) Turkey Russia Spain Taiwan

Domestic customers of VSSL

Highway Industries Ltd. Sona blw precision forgings Ltd. Shriram Pistons & Rings Bill forges Pvt. Ltd. Barroc Engineering Pvt. Ltd. Amtek Auto Ltd.

Sale offices of VSSL

Ludhiana Gurgaon Pune Chennai Banglore Uttra khand Rajyasthan

Various Macro Factors Affecting the Steel Industry

Government Technological Economical Social(Case study has been done on Posco steel plant)

Modes of Payment Advance Payment Bill of Exchange Letter of Credit

Associations

All India Induction Furnace Association (AIIFA)

Working: -

i. Represent the interest of electric induction melting furnace industry.ii. Provides link between induction melting furnace units and government.iii. Policy making with govt. on custom and excise.

Automotive Component Manufacturer Association Of India (ACMA)

Working: -

i. Technology enhancement.ii. Gathering information.iii. Organize auto expo and events.iv. Frame rules and regulations.

Society Of Indian Automobile Manufacturer (SIAM)

Working: -

i. Representing 46 leading vehicle manufacturing companies.ii. Provide channel of communication for automobile industry with Government, nationally and internationally.iii. Organize auto expo and trade fairs with ACMAiv. Frame rules and regulations

VSSL Activities toward Corporate Social Responsibility (CSR)

As a responsible corporate citizen, VSSL is committed to providing asafe, progressive, and sustainable work environment. Our mission is to improve the quality of life of our people, while ensuring that our endeavors contribute towards the betterment of the communities of the areas in which we operate.Vardhman Special Steels Limitedregularly invests a part of its earning to address various socioeconomic apprehensions looming over the world andhuman race. Our CSR initiatives focus on healthcare initiatives, social and environmental sustainability, rural development, and inclusive growth.

Our CSR values:Preserving Environment

VSSL firmly believes that in order to ensure a prosperous tomorrow, it is indispensable to restore and preserve the much critical ecological balance. Aligned with this understanding, we practice every measure that can reduce the carbon footprints of our manufacturing facilities and offices.

Improving Communities

As a company, we believe that improving the communities of the places in which we operate is one of our core responsibilities. That explains our active participation in various social initiatives, including the establishment of Sri Aurobindo Socio-Economic & Management Research Institute.

Ensuring Safety

Providing a safe work environment has always been a priority at Vardhman. We believe in progressing with evolving technologies in order to provide our workforce with ideal work conditions that promote efficiency and productivity, with all prescribed safety measures in place.

Pioneering Values

Setting new benchmarks is a way of life at Vardhman. Valuing innovation and creativity, we are always open to new suggestions and ideas that can augment our overall contribution as a corporate citizen of the world, and help make the world a better place for one and all.

Organizational Structure

Recruitment:

Sources of Recruitment The sources within the organization itself to fill a position are known as inter sources of recruitment.

Recruitment of the candidate from other sources which are outside the organization is known as external sources of recruitment.

Process of Recruitment

Performance Appraisal Process

A performance appraisal, or performance review, is a formal interaction between an employee and manager. This is when the performance of the employee is assessed and discussed in thorough detail, with the manager communicating the weaknesses and strengths observed in the employee and also identifying opportunities for the employee to develop professionally.Here is the process involved in performance appraisal:

1. Establishing Performance StandardsIn this we use as the base to compare the actual performance of the employees. In this step it requires to set the criteria to judge the performance of the employees as successful or unsuccessful and the degrees of their contribution to the organizational goals and objectives. The standards set should be clear, easily understandable and in measurable terms. If employee doesn't come up to expectance, then it should be taken extra care for it.

2. Communicating the standardsIt is the responsibility of the management to communicate the standards to all the employees of the organization. The employees should be informed and the standards should be clearly explained. This will help them to understand their roles and to know what exactly is expected from them.

3. Measuring the actual PerformanceThe most difficult part of the performance appraisal process is measuring the actual performance of the employees that is the work done by the employees during the specified period of time. It is a nonstop process which involves monitors the performance all over the year. This stage requires the watchful selection of the suitable techniques of measurement, taking care that individual bias does not affect the outcome of the process and providing assistance rather than interfering in an employees work.

4. Comparing the Actual with the Desired PerformanceIn this the actual performance is compared with the desired or the standard performance. The comparison tells the deviations in the performance of the employees from the standards set. The result can show the actual performance being more than the desired performance or, the actual performance being less than the desired performance depicting a negative deviation in the organizational performance. It includes recalling, evaluating and analysis of data related to the employees' performance.

5. Discussing ResultsThe result of the appraisal is communicated and discussed with the employees on one-to-one basis. The focus of this discussion is on communication and listening. The results, the problems and the possible solutions are discussed with the aim of problem solving and reaching consensus. The feedback should be given with a positive attitude as this can have an effect on the employees' future performance. The purpose of the meeting should be to solve the problems faced and motivate the employees to perform better.

6. Decision MakingThe last step of the process is to take decisions which can be taken either to improve the performance of the employees, take the required corrective actions, or the related HR decisions like rewards, promotions, demotions, transfers etc.

Break Even Point

A company'sbreakeven pointis the point at which its sales exactly cover its expenses. The company sells enough units of its product to cover its expenses without making a profit or taking a loss. If it sells more, then it makes a profit. On the other hand, if it sells less, it takes a loss.To compute a company's breakeven point in sales volume, you need to know the values of three variables. Those three variables are fixed costs,variable costs, and the price of the product. Fixed costs are those which do not change with the level of sales, such as overhead. Variable costs are those which do change with the level of sales.

Fixed Costs/Price - Variable Costs = Breakeven Point in Units

Sale Price / ValueXXX

Less: variable costXXX

ContributionXXX

ContributionXXX

Less: Fixed CostXXX

Profit / Loss00

Mission and Vision

Mission-Customer delight-By providing superior products on time every time.Share holder delight-By providing better than market returns on investmentsEmployee delight-By providing opportunities to learn contribute and enjoy working in Mahle filters.

Vision-Be the leading supplier of filter system in India and a global supplier of automotive and Industrial filter for both OE.

Suggestion and Recommendations

Vardhman special steel Ltd. is a leading firm in Aftermarket. They do B-B business with domestic as well as international market. They have very good relations and awareness amongst their domestic B-B customers but there is lack of awareness about their product in foreign market. So they should focus more towards spreading awareness and doing brand promotions at international level because as we know the govt. of india is also supporting the exporting firm and there are so many potential customers in foreign market so that they can generate more profit and it will help to develop our country also.

They should do advertisement for their products.

They should take part in various exhibitions and trade fairs in foreign countries.

The company is using NOW software (designed by data text) in its various departments to work efficiently but this software is ineffective for various department because it didnt provides the information regarding the product during the process of production and various departments like PPC has to take manual report from marketing department so here company should use such a software which includes all functions for the use of various department and also gives facility to track the product.

CONCLUSION

This one month of my internship is the golden and crucial period of my life in which I have learned practically about marketing and various strategies followed in day to day corporate life. Earlier I had very little knowledge about the company and its functioning but now I can say that I have fair knowledge about the company and functioning of its several department and production. I also got fair knowledge about how to work in corporate environment and how to absorb pressure.

The basic conclusion drawn during this project is that company is very good at their financial strengths and the new strategies they adopt. The company should adopt aggressive measures for their brand promotion expansion.

Bibliography

steel.gov.in

www.vardhman.com/products_steel.asp

www.moneycontrol.com

Annual report of company

WWW.BUSINESSDICTIONARY.COM

REFF BY PHILIP COTLER

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Vardhman Steel