SUMMER INTERNSHIP PROJECT REPORT

AT

BHILAI STEEL PLANT (SAIL)

A Project Report Submitted In Partial Fulfillment of the Requirements

For The Award of the

MASTERS IN BUSINESS ADMINISTRATION

TO

M.S.RAMAIAH ACADEMY OF MANAGEMENT

BY

ANAND KUMAR SUNDRANI

15MB4511
MBA (UOM)
BATCH 2015-17
Under the guidance of
Dr. A.K BANDYAPADHYAY

M. S. RAMAIAH ACADEMY OF MANAGEMENT

NEW BEL ROAD, BANGALORE-560054

 SEPTEMBER 2016

STUDENT’S DECLARATION

I hereby declare that the Project Report conducted at Bhilai Steel Plant (SAIL)
Under the guidance of Mr. Kaushik Basu and Mr. P.K Sahu submitted in partial
fulfillment of the requirements for the MASTERS IN BUSINESS ADMINISTRATION (UOM) to
M.S. Ramaiah Academy of Management is my original work and the same has
not been submitted for the award of any other Degree/Diploma/Fellowship or other
similar titles or prizes

Place: Bangalore (ANAND KUMAR SUNDRANI)

Date: Reg. No.15MB4511

 CERTIFICATE

This is to certify that the Project Report at Bhilai Steel Plant (SAIL) submitted in
partial fulfillment of the requirements for the award of the MASTERS IN BUSINESS
ADMINISTRATION to M.S.RAMAIAH ACADEMY OF MANAGEMENT is a
record of bonafide training carried out under my supervision and guidance and that
no part of this report has been submitted for the award of any other
degree/diploma/fellowship or similar titles or prizes.

GUIDE
Signature:
Name: Dr. A.K Bandyapadhyay
Qualifications: B.E, M.E, MBA, Ph.D
 ACKNOWLEDGEMENT

I extend my special gratitude to our beloved Dean Dr. H. Muralidharan and

Academic Head Prof. V. Narayanan and Program Head Dr. Anuradha T.N.
for inspiring me to take up this project.

I wish to acknowledge my sincere gratitude and indebtedness to my project guide

Dr. A.K Bandyapadhyay of M.S. RAMAIAH MANAGEMENT INSTITUTE
Bangalore for her valuable guidance and constructive suggestions in the
preparation of project report.

(ANAND KUMAR SUNDRANI)

Name of the Student

 Index
Serial No. Contents Page No.

Cover Page

Company Certificate

1 Guide Certificate

2 Student Declaration

3 Acknowledgement

4 Table of Contents

5 International Trade Division

6 Export in BSP

7 New Enlistment of Customers

8 Export Procedure

9 SWOT Analysis

10 Suggestions

11 Conclusion

12 Bibliography
Achievements

Eleven times winner of Prime Minister's Trophy for Best Integrated Steel Plant in the
country, Bhilai Steel Plant (BSP) is India's sole producer & supplier of world class rails for
Indian Railways including 260 metre long rails, and a major producer of large variety of
wide and heavy steel plates and structural steel. With an annual production capacity of
3.153 MT of saleable steel, the plant also specializes in other products such as wire rods and
merchant products. The entire range of TMT products (Bars & Rods) produced by the
Plant is of earthquake-resistant grade and superior quality. The plant also produces heavy
structural including channels and beams.

Since BSP is accredited with ISO 9001:2000 Quality Management System Standard, all

Saleable products of Plant come under the ISO umbrella. The Plant's HR dept. is also
certified with ISO 9001:2000 QMS Standard. IS0:14001 has been awarded for Environment
Management System in the Plant, Township and Dalli Mines. The Plant is accredited with
SA: 8000 certification for social accountability and the OHSAS-18001 certification for
Occupational Health & Safety.

Among the long list of national awards it has won, Bhilai has bagged the CII-ITC
Sustainability award for three consecutive years. BSP won 1st prize in National Energy
Conservation Award 2013 in Integrated Steel Sector in recognition of major energy saving
initiatives in 2011-12 and '12-13. The Plant again won this award for Year 2014 for achieving
a 5% saving in thermal energy consumption and savings of 2% in electrical energy
consumption over the previous year.
PRODUCT-MIX TONNES/ANNUM

Semis 5,33,000

Rail & Heavy Structural 7,50,000

Merchant Products
5,00,000
(Angles, Channels, Round & TMT bars)

Wire Rods (TMT, Plain & Ribbed) 4,20,000

Plates (up to 3600 mm wide) 9,50,000

Total Saleable steel 31,53,000

Location : Forty kms west of Raipur, the capital city of Chhattisgarh, along the Howrah-
Mumbai railway line and the Great-Eastern highway, stands Bhilai Steel Plant (BSP)
 “There’s a little bit of SAIL in everybody’s life”

Steel Authority of India Limited

Introduction:

Steel Authority of India Limited (SAIL) is one of the largest steel-making company in India. It is
fully integrated steel maker, producing both basic and special steels for domestic construction,
engineering, power, railway, automotive and defense industries and for sale in export markets.

SAIL is categorized under seven Maharatna companies which comes amongst top public sector in
terms of turnover. SAIL manufactures and sells a broad range of steel products, including hot and
cold rolled sheets and coil, galvanized sheets, electrical sheets, Structural, railway products, plates,
bars and rods, stainless steel and other alloy Steels. SAIL produces steel at its five integrated plants
and three special plants located principally in the eastern and central region and situated close to
domestic sources of raw materials, including the iron ore, limestone and dolomite mines. The
company has the distinction of being India’s one of the largest producer of iron and of having the
country’s second largest mines network. This gives SAIL a competitive edge in terms of captive
edge in terms of captive availability of iron ore, limestone, and dolomite which are inputs for steel
making.

SAIL’s wide range of long and flat steel products are much in demand in the domestic as well as
the international market. The vital responsibility is carried out by SAIL’s own Central Marketing
Organization (CMO) and the International Trade Division. CMO encompasses a wide network of
34 branch offices and 54 stockyards located in major cities and towns throughout India.

SAIL has a well-equipped Research and Development Centre for Iron and Steel (RDCIS) at Ranchi
which helps to produce quality steel and develop new technologies for the steel industry. Besides,
SAIL has its own in-house Centre for Engineering and Technology (CET). Training Institute
(MTI) and Safety Organization at Ranchi. Our captive mines are under the control of the Raw
Materials Division in Kolkata. The Environment Management Division and Growth Division of
SAIL operates from their headquarter in Kolkata. Almost all plants and major units are ISO
Certified.

Major Units of SAIL:

Integrated Steel Plants:-

 Bhilai Steel Plant (BSP) in Chhattisgarh

 Durgapur Steel Plant (DSP) in West Bengal
 Rourkela Steel Plant (RSP) in Orissa
 Bokaro Steel Plant (BSL) in Jharkhand
 IISCO Steel Plant (ISP) in West Bengal

Special Steel Plants

 Alloy Steel Plants (ASP) in West Bengal

 Salem Steel Plant (SSP) in Tamil Nadu
 Visvesvaraya Iron and Steel Plant (VISL) in Karnataka

Subsidiary

 Maharastra Elektrosmelt Limited (MEL) in Maharastra

Joint Ventures:-

Sail has promoted joint ventures in different areas ranging from power plants to e-commerce.
NTPC SAIL Power Company Pvt. Ltd

A 50:50 joint venture between Steel Authority of India Limited (SAIL) and National Thermal

Power Corporation Limited (NTPC Ltd), it manages the captive power plants at Rourkela,
Durgapur and Bhilai with a combined capacity of 314 Mega Watts.

Bokaro Power Supply Company Private Limited

This 50:50 joint venture between SAIL and Damodar Valley Corporation formed in January 2002
is managing the 302 MW power generation and 1880 tons per hour steam generation facilities at
Bokaro Steel Plant.

Mjunction Services Limited

A joint venture between SAIL and TATA Steel on 50:50 basis, this company promotes e-
commerce activities in steel and related areas.

SAIL-Bansal Services Centre Ltd.

SAIL has formed a joint venture with BMW industries Ltd. On 40:60 basis to promote a service
centre at Bokaro with the objectives of adding value to steel.

Bhilai JP Cement Ltd

SAIL has also incorporated a joint venture company with Jaiprakash Associates Ltd to set up a 2.2
MT cement plant at Bhilai.

Bokaro JP Cement Ltd

The company has incorporated another joint venture company with Jaiprakash Associates Ltd to
set up a 2.1 MT cement plant at Bokaro.

SAIL & MOIL Ferro Alloys (Pvt.) Limited

The company has incorporated a joint venture company with Manganese Ore (India) Ltd to set up
ferro-manganese and silico-manganese plants at Nandini / Bhilai, of 1.0 lakh tonne capacity.
S&T Mining Company Pvt. Ltd
The company has incorporated a joint venture company with TATA Steel for acquisition &
development of coal blocks/mines.

International Coal Ventures Private Limited

International Coal Ventures Private Limited is a joint venture company comprising five central
PSU companies: SAIL, Rashtriya Ispat Nigam Limited (RINL), Coal India Limited (CIL), NTPC
Limited, and NMDC Limited.
In November 2009, the company and NMDC Limited have agreed to jointly mine limestone in
Himachal Pradesh, India
Ownership and Management

The government of India owns about 86% of SAIL’s equity and retains voting control of the
Company. However, SAIL, by virtue of its ‘Maharatna’ status, enjoys significant operational and
financial autonomy.

VISION:-

To be a respected world class corporation and the leader in Indian steel business inequality,
productivity, profitability and customer satisfaction.

CREDO:-
1. We build lasting relationships with customers based on trust and mutual benefit.
2. We uphold highest ethical standards in conduct of our business.
3. We create and nurture a culture that supports flexibility, learning and is proactive to change.
4. We chart a challenging career for employees with opportunities for advancement and
rewards.
5. We value the opportunity and responsibility to make a meaningful difference in people’s
lives.
WIDEST RANGE OF STEEL PRODUCTS:
With an unmatched range of mild steel, both in long and flat categories, as well as a wide
variety of special and stainless steels. SAIL delivers customized steel. A nation-wide spread
of Sales offices, Warehouses, Dealers and a team of seasoned Application Engineers ensure
swift and satisfactory fulfilment of steel requirement in any corner of the country at any
time.

Product Catalogue:


APPLICATIONS OF SAIL STEEL PRODUCTS

Hot Rolled Coils, Sheets and Semi-Finished Products Plates

Cold Rolled Products Railway Products Structurals

Bars and Rods Speciality Products

Alloy and Stainless Products

Pipes

Tanks

Railway cars

Bicycle frames

Ships

Engineering and military equipment

Automobile and truck wheels frames and body parts

Feedstock for cold rolling mills

Feedstock for Silicon sheet mill

Feedstock for Pipe plant in a wide range of widths and thicknesses

Feedstock for higher value-added steel products

Hot Rolled Product coils and sheets

Direct industrial and manufacturing applications. The company is the largest producer of hot
rolled coils sheets in India. Largest product category of the company in terms of both sales
volume and revenue.

Converted into finished products in the company's processing plant

Sold to re-rollers for conversion to finished products.

Semi-Finished Products

blooms, billets and slabs

Bridges

Steel structures

Ships

Large diameter pipes

Storage tanks

Boilers

Railway wagons

Pressure vessels

Automobile industry to produce car body panels

Further processing, including for colour coating, galvanizing and tinning

The company also produces further processed cold rolled products, including galvanized sheets
and tin plates.

Cold rolled Products cold rolled sheets and coils

Cold rolling of hot rolled products produces a superior surface finish, improves the physical
properties of the steel, such as tensile strength, and reduces its thickness to precise gauges. As a
result, cold rolled products generally command higher prices than hot rolled products.

Rails

Wheels and axles

Sleeper and fish plates (which are used to connect and strengthen rails),

Railway Products

Produced through a process of hot rolling blooms in the finishing mills and forging ingots and
blooms in the forging press or hammer.

Mining

Tunnels
Factory structures

Transmission towers

Bridges

Railways

Other infrastructure projects

Structurals I-beams, channels and angle

Structural steel products are produced through a process of hot rolling in the section or structural
mills. They are long steel products with cross sections of various shapes

Construction industry

Bars and Rods Reinforcement steel and wire rods

The company is one of the largest producers of reinforcement bars in India. The company
produces steel bars and rods through a process of hot rolling billets in the finishing mills.

Electrical machinery

Food packaging

Conveying water, oil and gas

Speciality products

Electrical sheets, tin plates and pipes

Automobile

Railway

Defence

Household utensils

Automobile trims

Conveyor belts
Elevators

Chemical and food processing equipment

Building and interior decoration

Pharmaceutical equipment

Alloy and Stainless Products

Alloy and stainless steel plates, hot rolled sheets, cold rolled sheets, bars, billets, blooms,
forgings and die blocks.

Plates

The company is currently the largest producer of steel plates in India with a domestic market
share of more than 80 per cent for these products. The company is the only producer of wide and
heavy plate products in India

Precision tubes

Containers

Bicycles

Furniture

PRODUCTS OF THE SAIL :-

The product manufactured in the SAIL are as follows:

Products

primary secondary
products products

Long Flat Coal

Semis Scraps Slag
Products Products cemicals
Product Specifications:

Products which come under Primary Products are:

1. Semis: The products which comes under this are the products used to manufacture main
products. This are semi-finished products. The products are blooms, billets &slabs.
2. Long Products: The products which comes in this category are
1. Light weight structure:-
 Angles of Dimensions - 50*50 , 65*65 , 70*70, 75*75 , 80*80 , 90*90 mm2
 Channels of Dimensions – 75* 40 , 100*50 mm2
2. TMT:-
 TMT of Dimensions – 20, 25, 28, 32, 36, 40, 45 mm
 Rounds - 28, 30, 32, 36, 40, 50, 53,56, 63, 67 mm
3. Wire Rod:- 5.5, 6, 7, 8 mm
4. TMT Coils:- 8, 10, 12 mm
5. Rails:- 40, 52, 60 kg
6. Heavy Structure :-
 Beam of Dimensions- 600x210, 500x180, 450x150 mm2
 Channels of Dimensions- 400x100, 300x90, 250x82 mm2
 Angles of Dimensions-150x150, 200x200 mm2
7. Crane Rails :- 80, 100 &120 mm
3. Flat Products: The products in this category are
1. Plates of dimension range 8 – 160 mm * 1500 – 3300 mm * 4.5 – 15.0 mm.
2. HR coils, CR coils, GP Coils
3. HR Sheets, CR coils, GP sheets, Electrical sheets

Products which come under Secondary Products are:

1. Pig Iron:- The mass of pig shall be either 45 kg having two notches or 22.5 kg having one
notch, subject to mutual agreement between the purchaser and manufacturer.
 2. Coal Chemicals:- Benzene (NG), Toluene (NG & IG), Xylene, Light Solvent Naptha,
Solvent Oil, Heavy Solvent Naptha, Benzol, (IG), etc
3. Fertilizers:- Ammonium Sulphate (20.6%N). It is also a Coal Chemical. Its brand name is
‘RAJA’.
4. Slags: This is a waste product obtain from blast furnace for Cement manufacturing.
5. Scraps:- This are the extra cuttings of the standard products.

Bhilai Steel Plant (BSP)

Eleven times winner of Prime Minister's Trophy for Best Integrated Steel Plant in the country,
Bhilai Steel Plant (BSP) is India's sole producer & supplier of world class rails for Indian Railways
including 260 meter long rails, and a major producer of large variety of wide and heavy steel plates
and structural steel. With an annual production capacity of 3.153 MT of saleable steel, the plant
also specializes in other products such as wire rods and merchant products. The entire range of
TMT products (Bars & Rods) produced by the Plant is of earthquake-resistant grade and superior
quality. The plant also produces heavy structural including channels and beams.

BSP has received Integrated Management System (IMS) Certificate by a single certifying agency
(M/s DNV), integrating QMS, EMS, OHSAS & SAMS - becoming the first SAIL unit and among
few corporate houses in India to achieve this unique distinction.

Among the long list of national awards it has won, Bhilai has bagged the CII-ITC Sustainability
award for three consecutive years. BSP won 1st prize in National Energy Conservation Award
2013 in Integrated Steel Sector in recognition of major energy saving initiatives in 2011-12 and
'12-13. The Plant again won this award for Year 2014 for achieving a 5% saving in thermal energy
consumption and savings of 2% in electrical energy consumption over the previous year.

It is located at the central position of India, which is one of the major iron belt of India, and it is
about Forty kilometers west of Raipur, the capital city of Chhattisgarh, along the Howrah-Mumbai
railway line and the Great-Eastern highway, stands Bhilai Steel Plant (BSP). The captive mines of
the plant located at Dalli Rajhara supplies iron ore and lime stone use to available from Nandini
captive mines. At present, Lime stone is procured from outside. The other major raw material, coal
is purchased from outside either through import or from indigenous market.

Bhilai Steel Plant is planning to expand its production to 7.0 MT by the year of 2019-2020. During
its expansion plan all energy efficient technology will be installed, after this the energy
consumption may come down to 5.9 gcal/tcs.

PROCESS OF MAKING OF STEEL FROM IRON ORES:

Ore Handling Plant:

The iron ores taken from mines are separated from other rocks and particles then converted in to
fine ores which contains iron content up to 50% to 65%. This process is called Benefication.

Sinter Plant:

These fine ores are then given to the Sinter Plant as a input. In this plant, the fine ores are used for
cake making. The iron ores are converted into rectangular shaped cake.

Coke Owen Plant:

In coke owen plant, the carbonization of coal to coke is done. The coal is heated in the absence of
air to make coke.

Coal Coke + Coke oven gas(CO gas)

This Coke owen gas contains different coal by- products such as Tar products like naphthalene,
Benzol products like benzene, xylene, toluene, etc and Ammonium Sulphate which is used as Raja
Fertilizers and other CO gas are used as fuel gas.

Blast Furnace:

In blast furnace, the reduction process is done. In this process, the iron ore is treated with coke
obtained from coke owen plant. As a result of this reaction, we get the hot metal which is 95% of
pure steel, CO, CO2, slag and Blast furnace gas. This hot metal can be solidified and sold in the
market as Pig Iron.

Fe2O3 + C → Hot metal + CO + CO2 + BF gas + Slag (Reduction Reaction)

The slag produced in BSP is given for making cement to JP Cement.

Steel Melting Shop (SMS):

The hot metal is purified in this shop by oxidation process. The hot metal is oxidized to get cast
steel i.e., 98% pure steel along with SMS gas and SMS slag.

These cast steel is then solidified using caster. Casters are of two type:

1. Slab Caster
2. Bloom Caster

The cast steel is poured into molds to make ingots by old method in which the mold is kept for 24
hours for cooling and then converted into various shapes.
VARIOUS MILLS AND PRODUCTS OF MILLS:

Blooms and Billets Mill: In this mill, the ingots are taken as input and these are rolled to make
blooms and billets.

Plates Mill: In this mill, slabs are rolled to make plates of dimension range 8 – 160 mm * 1500 –
3300 mm * 4.5 – 15.0 mm.

Merchant Mill: In this mill, blooms and billets are rolled to make various products :-

1. Light weight structure:-

 Angles of Dimensions - 50*50 , 65*65 , 70*70, 75*75 , 80*80 , 90*90 mm
 Channels of Dimensions – 75* 40 , 100*50 mm2
2. TMT:-
 TMT of Dimensions – 20, 25, 28, 32, 36, 40, 45 mm
 Rounds - 28, 30, 32, 36, 40, 50, 53,56, 63, 67 mm

Wire Rod Mill: In this mill, billets are rolled for making of :-

1. Wire Rod:- 5.5, 6, 7, 8 mm

2. TMT Coils:- 8, 10, 12 mm

Rail & Structure Mill: In this mill, blooms are rolled to make rails and billets are rolled to make
heavy structures.

1. Rails:- 40, 52, 60 kg

2. Heavy Structure :-
 Beam of Dimensions- 600x210, 500x180, 450x150 mm2
 Channels of Dimensions- 400x100, 300x90, 250x82 mm2
 Angles of Dimensions-150x150, 200x200 mm2
3. Crane Rails :- 80, 100 &120 mm

MAJOR SUPPLIERS:-
  Apollo Industrial Corporation(Mumbai)
 Ashok Leyland(Chennai State-I.N)
 Bhel(Bhopal,Mumbai)
 Bharat Petroleum Gas Ltd(Nagpur)
 BIRLA Corporation Ltd(Kolkata)
 Cimmco Birla Ltd(New Delhi)
 Dunlop India Ltd(Kolkata)
 Siemens Ltd(Raipur)
 HMT Ltd(Ranchi)

MAJOR BUYERS:-

 Indian Railway
 Vizard Profile Ltd
 High Pressure boiler plant BHEL (Trichey)
 NTPC Super Thermal Power Project
 Jindal Steel & Power Ltd (Raigarh)
 NTPC Ltd(Delhi)
 Common India Ltd(Mumbai)
 Chandigarh Industrial Jourism &
 Development Coporation(Chandigarh)
 Corpro International(Italy)
 Sangyong Corporation(Japan)

COMPETITORS:-

 Ispat Industries Ltd.

 Alloyds Steel Ltd
 Essar Steel Ltd
 Jindal Steel & Power Ltd
 Jindal Strips Ltd
 Uttam Steel Ltd
  National Steel Industries
 Bhushan Steel & Strips Ltd

Marketing and Business Planning

FUNCTIONING:-

Marketing and business planning department of BSP acts as an interface between plant and CMO
for coordinating marketing activities with CMO for sale of prime products. Apart from this, it also
carries out direct sale of secondary products and by-products generated in plant.
 Sales Planning

Order Mgmt.
Coordination with
CMO/ ITD for sale
of prime products
Key A/c Mgmt.

Complaint
Key activities of Handling
M&BP Deptt.

Secondary I & S
Items

Direct sale of
Coal Chemicals,
secondary/ by-
Fertilizers
products

Granule, Slag,
Misc Items

Sales Planning and Order management:-

Marketing and Business Planning Section is present in every unit of SAIL. Marketing of primary
products is handled by CMO (Central Marketing Organization). CMO with the help of BSO
(Branch Sales Office), RSO (Regional sales office), Warehouses and Various Dealers recieves the
orders from the customers and according to their order, the products if available, are dispatched
and delivered to the customers.

While the marketing of secondary products are handled directly by M&BP (Marketing and
Business Planning) units of each plant. The customers order directly to the M&BP section of each
plant and then according to their order the product is delivered to them. The secondary products
are also sold by auctions in this the highest bider gets the product.

After receiving orders from customers, the products are inspected for whether the product can be
manufactured or not, if the product is available or not, how much quantity is available, whether
the products are of good quality or not, whether the product is of mentioned dimension or not, etc.
This inspection is done by Plant enquiry committee whose members are from various sections like
M&BP (Marketing and Business Planing), PPC (Planing and Production Control), respective mill
in which the product is to be manufactured, SMS (Steel Melting Shop) & RSS.

Order Processing Cycle:-

Customer Branch SRM Marketing PPC

Documents Heat making/

Production Planning

Dispatch Shipping Inspection Rolling

(Rail/ Road) Bay Testing (RCL) Shop

Pricing of the Products:-

Pricing of the products is determined by various fact such as cost of production, Profit margin,
demand, supply, competetion, government policy. Pricing also includes transportation cost if paid
by the manufacturer. Delivery of goods can be done by Ship, Road, Rails and Air medium can also
be used if material is not much heavy i.e., for small products.

The pricing for all products at BSP is done by the Government of India. This prices are fixed and
are quite economical for the customers as it is quite low as compared to the compititors.

Complaint Handling:-

Apart from taking regular feedback from the customers on products and services, there is also a
well-documented customers complaint handling procedure. The procedure for taking
corrective/preventive action is audited for checking its effectiveness regularly by internal quality.
Auditors during schedule internal quality audits as well as by the auditors from M/S LRQA,
certifying agency for ISO: 9001QMS, during surveillance audits. The complaint data are
systematically compiled, analyzed and reported management review meeting held quarterly. This
is a close loop system where the customer is given the feedback on the corrective action taken at
plant to avoid recurrence of the problem.

Secondary Iron & Steel Products:-

At present, plant carries out sale of secondary iron and steel products primarily through On-Line
Forward Auction (OLFA) through metaljunction.com as per the corporate guidelines. The
material is offered in different lot sizes in metaljunction’s internet platform. The lots for which the
prices are more than the reserve price, are cleared for sale and the highest bidder amongst the
participants where H1 price is above reserve price gets the offer to buy the material in line with
guidelines. OLFA system ensures participation from wider customer base, competitive pricing as
well transparency.

Coal Chemicals, Fertilizers:-

Presently both fixed price and OLFA mode are being adopted for sale of these products. Dynamic
pricing system is adopted for these products as per the market trend. The products are used in
chemical industries/ aluminum industries, etc. Ammonium Sulphate is sold for agricultural sector
to different states namely Chhattisgarh, Madhya Pradesh, Andhra Pradesh, Maharastra, Bihar, etc.
the dispatches are done both by rail and road.

Blast Furnace Granulated Slag:-

 Mostly sold through long term contracts (MoUs)

 Other customers also buy through Fixed Price Sales Mode.
Central Marketing Organization

The ISO:9001:2000 certified Central Marketing Organization (CMO) is India’s largest industrial
marketing set-up that markets carbon steel produced by the five integrated steel plants of SAIL.
Headquartered in Kolkata, it transacts business through its network of 34 Branch Sales Offices
spread across the four regions, 25 warehouses equipped with mechanized handling system, 11
customer contact offices and 16 consignment agents. CMO’s domestic marketing effort is
supplemented by its ever widening network of authorized and rural dealers who meet the demands
of the smallest customers in the remotest corner of the country. A strong IT support system enables
real time network connectivity within the entire CMO network. Extensive customer contact,
product and segment specialization, close monitoring of order servicing and feedback analysis
through the Customer Satisfaction Index are established norms at CMO.

MAJOR FUNCTIONS:-

Market research, Demand assessment, segment prioritization, product planning, sales and after
sales services, etc. CMO has a network of sales offices and stockyards within the country for
purpose of distribution of materials outlets. The other aspects controlled by CMO are planning,
customer services, transport and shipping data information system, etc. The distribution of Iron
and Steel products is done by the CMO to 45 branches and stockyards located in all important steel
consuming sectors in the country. For administration purposes, the branches are grouped under 6
regions. The distribution through stockyard is of the order of 69% and through direct dispatchesby
the plant is 31%. They operate various schemes of the products are fast and customers are satisfied.

BRANCH SALES OFFICE:-

It is a part of CMO various BSO are located over India which performs the job of marketing of
SAIL products throughout the India. It receives the orders from various customers, does market
research, analyze competitive position, demand pattern, etc.

International Trade Division (ITD)

International Trade Division (ITD) is an ISO 9001:2000 accredited unit of SAIL’s Central
Marketing Organization at New Delhi – undertakes exports of Mild Steel products and Pig Iron
produced by SAIL’s five integrated steel plants. Ever ready to meet the exacting demands of
CMO’s international customers, ITD maintains a close liaison with customers as well as
production units to cater to the customized requirements of its international customers, in terms of
quality, quantity and sizes.

ITD has successfully established the brand name SAIL globally by supplying Rails, Structural,
Merchant products, Wire Rods, Re-bars, Plate Mill Plates, Hot Rolled Coils, Hot Rolled Plates /
Sheets, Cold Rolled steels, Galvanized steels, Cold Rolled Non-Oriented (CRNO) coils, Stainless
Steel sheets/coils, Checkered Plates, Slabs, Billets, Blooms and Pig Iron, besides cut-to-size Hot
Rolled and Cold Rolled materials in all continents. Most products are covered by stringent
certifications such as CE marking, TUV and 'U' mark required by sophisticated end uses in
European markets.

SAIL products have berthed successfully at Japan, China, Korea, Taiwan, Vietnam, Philippines,
Singapore, Malaysia, Thailand, Indonesia, Australia, Mexico, Europe (UK, Germany, France,
Belgium, Italy, Spain, Netherlands, Portugal), Sudan, Oman, UAE, and many more, as well as in
neighboring countries such as Myanmar, Bangladesh, Sri Lanka and Nepal

Being a manufacturer of world-class steel products, SAIL offers to its customers a wide product
profile matched with excellent service, and a choice ranging from widely traded items like Hot
Rolled Coils to specialty products like CRNO steels.

SAIL’s products have found ready acceptance in about 75 countries the world over. Products
exported to various countries include Mild Steel Billets, Slabs, Wire rods, Structurals, Hot-rolled
Plates/Coils/Sheets, Cold-rolled Coils/Sheets, Rails, CRNO Steels and Pig Iron. SAIL’s Mild Steel
and Pig Iron exports are undertaken by its International Trade Division (ITD) based in New Delhi.

Offers are subject to availability and confirmation of terms and conditions on case to case basis.

MAJOR FUNCTIONS:

 Marketing of Steel in overseas market.

 Finalization of export sales contract.
  Co-ordination with plant and T&S for production and shipment.
 Claim settlements

FUNCTIONS OF TRANSPORT & SHIPPING DIVISION (T&S):

 To finalize shipping arrangement/ vessel fixation/chartering for export/insurance.

 Complete the formalities of customs/ port clearance.
 Negotiation of documents/ realization of payment for export.
 Completion of post-export formalities.
 Settlement of freight/ dispatch/ demurrage for vessels.

EXPORT PROGRAM OF BSP:

BSP when decided to start to export, it adopted the “ADAPTED MARKETING MIX
STRATEGY”. Thus it changes its marketing mix elements according to target market as a result
it has to do potential adaptations to the 4 P’s to cater the foreign market. 4 P’s related to export are
as follows:

Product:

To sell its product to international market it requires ISO:9002 quality assurance system. Without
this specification, the product cannot be sold in the foreign market. Basically, BSP adopts two
adaptation strategies:
  Strategy extension:- It means that it introduces product without any change to the foreign
market.
 Product Adaptation:- It involves altering the product to meet local performance according
to the customer demand.

The product being exported to the foreign market must have proper international specification and
grade size as per the demand. Recent technology should be developed and proper research should
be done to get new abroad market.

Product Exported To
Plates US, Europe, Japan, South East Asia, Taiwan, South
Korea, Middle East
Billets South East Asia, Sri Lanka, Nepal, Bangladesh
Wire Rods Middle East Asia, Sri Lanka, Nepal
Structural Sri Lanka, Bangladesh, Nepal, Myanmar
Pig Iron South East Asia
Slabs Indonesia, Malaysia, Thailand, South East Asia

The capacity change by Region is as under:-

Country Percentage of Export

Asia 77%
CIS 6%
Europe 6%
S. America 2%
N. America 3%
Other World 6%

Price:
Pricing decisions is the most critical elements of the marketing mix elements. Basically adopts
“COST + PRICING” in which a predetermined percentage of cost cold markup added to the cost
of production to determine the price. But several problems arises due to pricing in export market
like transfer pricing, dumping charges, gray marketing price escalation, several competitions, etc.
Deciding on pricing fall exports it has taken care of cost of transportation, tariffs, importers margin
and dealers to its factory price. This is usually done by ITD (International Trade Division) SAIL.

Place:

BSP has a privilege of producing specialized products. Basically channels in industrial products
are very less with generally a whole sellers or dealers in between the manufacturers and customers.

In between the ultimate foreign customers and BSP, there is CMOs, ITDs, SAIL work as dealer.

Promotion:

BSP though is an industrial enterprise do not give emphasis on the promotions and advertisement.
Its basic means of promotion is “Sales promotion”. It promote its products through publications,
magazines, newspapers, etc. It also offers discounts and rebates for its products. It also utilizes
public relation method like contacting through directly customers, seminars, etc. for promoting its
products.

The details of products exported to different countries in past two years:

2014-15 2015-16
Dest. Country PRODUCT (MT) (MT)
Bangladesh Plates 1024 615
Rails 0 1465
TOTAL(Bangladesh) 1024 2080
Belgium Plates 7604 0
Canada Plates 35509 0
CHINA(HONG KONG) Plates 218 0
GERMANY Plates 10305 0
Italy Plates 62 8205
Nepal Wire Rod 11988 5011
 Billets 14497 16570
Plates 2792 7737
Rails 0 187
TOTAL (Nepal) 29277 29505
Sri Lanka Billets 16741 0
Rails 64 0
TOTAL(Sri Lanka) 16805 0
Taiwan Plates 69523 6096
Ukraine Plates 5072 0
United Kingdom Plates 12177 0
Grand TOTAL 187576 45886

Interpretation:

By reading above data, we can interpret that the overall export of the product in year 2014-15 is
187576 MT and in year 2015-16 is 45886 MT which is very low as comparison to the year 2014-
15. We can say that the export has been decreased in this year. In Year 2015-16, most of the
country’s customers have started preferring their own country’s product. In this year, exports in
Bangladesh, Nepal and Italy has increased while other countries have not imported any of the
products. Taiwan also imported some plates but they also decreased their demand.

We can say that BSP was in loss in year 2015-16. BSP’s major exporting countries are Nepal and
Bangladesh. BSP rely on these countries for their exports and the profits earned by exporting
products.

The details of the products demanded in year 2015-16 by different countries are shown below with
the help of graph:-
 18000
16570
16000

14000

12000

10000
8205
7737
8000

6096
6000
5011

4000

2000 1465
615
0 0 187 0 0 0 0 0 0
0
Bangladesh Nepal Italy Taiwan

Plates Rails Billets Wire Rod

Interpretation:

From the above graph, we can say that the bulk demand of billets in Nepal was the main export
done by the BSP. But the billets are demanded only in Nepal while Plates are the major exporting
product because there are orders from every country for plates, then if the demand was in less
quantity for plates. Nepal’s other orders are for the rails and wire rods in which rails are exported
in less quantity.

On the second position, Italy has ordered 8205 MT Plates. After Italy, Taiwan comes with the
order of 6096 MT for plates. And then Bangladesh comes the total order of 2080 MT for both rails
and plates.
 EXPORTS OF YEAR 2015-16
Plates Rails Wire Rod Billets

36%
49%

11%
4%

The share of products exported in year 2015-16 can be seen above.

The major product exported in year 2015-16 is Plates with the total quantity of 22653 MT
demanded. This pie chart shows that the plates exported consists of 49% of total export in which
Italy has contributed the most. While the demand for Billets consist of 36% of the total exports in
which Nepal was the only contributing country.

The third position in export share is of wire rods with the percentage of 11% of total exports. The
export of wire rod is done only in Nepal.

The export of Rail consists of only 4% of total export done in 2015-16 which is a very small
quantity in which the contributing countries Bangladesh and Nepal.

Conclusion:-

From the detailed study of exports in year 2015-16, we can conclude that Nepal and Italy were the
major exporting countries of BSP for this year. And the products exported mostly was Plates and
billets.
The details of exports in different countries in year 2014-15 are shown below with the help of
graph:-

80000

69523
70000

60000

50000

40000
35509

30000

20000 16741
14497
11988 12177
10305
10000 7604
5072
2792
10240 0 0 000 0 0 0 2180 0 0 0 0 0 62 0 0 0 0 0 64 0 000 000 000
0

Plates Rails Wire Rods Billets

With the help of above graph, we can say that Taiwan was the major importer of BSP in 2014-15.
BSP exported 69523 MT plates to the Taiwan which was half of the total plates exported in various
countries. The second position goes to the Canada in which BSP exported 35509 MT of plates.
With the further analysis, we can say that Nepal is in the third position among exporting countries
of BSP. The Nepal has imported 14497 MT of billets, 11988 MT of Wire Rods and 2792 MT of
plates.

The fourth major exporting country is Sri Lanka with the demand of 16741 MT of Billets. Then
U.K. comes with the export of 12177 MT of plates. After U.K., Germany has imported 10305 MT
of Plates from BSP. The other exporting countries are Bangladesh with 1024 MT of Plates,
Belgium with 7604 MT of plates. China (Hongkong) with 218 MT of plates, Ukraine with 5072
MT of plates and in the end Italy has imported only 62 MT of Rails.

EXPORTS OF YEAR 2014-15

Plates Rails Wire Rods Billets

17%

6%
0%

77%

Above shown Pie chart gives the idea of products which are exported to the various countries in
year 2014-15.

We can say that plate was the major exporting product which is exported by the BSP with the
contribution of 77% of total exports done by BSP in 2014-15. Then with the contribution of 17%
of total exports done by BSP, comes the second major exporting product i.e., billets. The third
exporting product is Wire rods with the contribution of only 6% while rails have been exported to
only Italy with 05 of contribution to the total exports done by BSP.
New Enlistment for Customers
DETAILS REQUIRED FROM NEW CUSTOMERS:-

New customers desirous of starting import of Mild steel products of SAIL on sustained basis are
required to send the following details/documents for enlistment.

1. Company profile (The firm which will sign the contract and open L/C in favor of SAIL.)

2. Balance Sheet/Financial statement for Last two years or from the date of formation whichever
is later.

3. Address of the company, Contact Phone, Fax Numbers and e-mail, name of contact person
abroad who is authorized to deal with SAIL and similar details of representatives in India if any
along with their status.

4. Name of the Bank (with its full address) through which Letter of Credit would be provided

5. A certificate from the banker about business dealing with the customer.

Customers have to send the above details/documents at following address

Being a manufacturer of world-class steel products, SAIL offers to its customers a wide product
profile matched with excellent service, and a choice ranging from widely traded items like Hot
Rolled Coils to specialty products like CRNO steels.

SAIL’s products have found ready acceptance in about 75 countries the world over. Products
exported to various countries include Mild Steel Billets, Slabs, Wire rods, Structural, Hot-rolled
Plates/Coils/Sheets, Cold-rolled Coils/Sheets, Rails, CRNO Steels and Pig Iron. SAIL’s Mild Steel
and Pig Iron exports are undertaken by its International Trade Division (ITD) based in New Delhi.
Export Procedure
The procedure that are followed in the export of steel from BSP are as follows:

1. The various foreign based customers of steel requiring varying quality of steel negotiates
with the foreign based dealer. This dealer after getting a bulk order contact with the
International Trade Division (ITD) of SAIL to get the goods. It gives all the details about
the products and condition of purchase. The ITD in turn contacts with the export unit of
Marketing and Business Planning Section of BSP and depending upon the availability of
the demanded product it signs the deal with customers specifying all terms and conditions.
2. The ITD gives contract to BSP in the form of work order. The work order gives the
following details :-
 Name and Address of buyer
 Destination
 Price
 Description of the material like grade size, quality, quantity, etc.
 Conditions of sale like FOB
 Other provisions like delivery schedule, payment terms.
3. Shipping and credit enquiry: The ITD arrange for booking of shipping space in advance of
actual sending of goods. It is usually done through Vishakhapatnam port. Similarly, credit
worthiness of the importer should be thoroughly verify. He should be requested to open an
account in the form of Letter of credit with a bank having branches in both importing and
exporting countries. The SAIL’s overseas banks in SBI Kolkata.
4. Preparation for export: It involves following steps
 Production of goods or collection of produced goods DISPATCHES ADVICE is
sent to the production department with specializations and deadlines for
production of goods. After this, the goods are certificated by test cerficates.
 The produced goods are sent to Vishakhapatnam through rails which in turn gives
Railway Receipt.
  Arrangement for shipment, the plant gets exemption from sales tax and refund of
excise duty. For getting this incentives a legal form called “AR-4 Form” is to be
filled which shows that BSP is actually exporting its goods abroad.
 Packing
 Marketing
5. Customs and exchange formalities:-
 Shipping Bill
 Exports license
 GR Form
6. Placing the goods on-board the ship. As the goods are placed on the ship, the captain issues
MAT receipts showing the condition of goods, packing and marketing.
7. Insurance: This marine insurance is taken care by the importer as per FOB contract.
8. Bill of Lading: The possession of this B/L gives the ownership of the goods. It is being
sent to importer for possession of the shipping company.
9. Finally Payment is being received or by requesting to the bank after the last date of
shipment.

Thus, it completes the whole export procedure. The documents for tax payment, refund of duties,
custom clearance is prepared by Finance department of BSP. They start preparing all the
documents for export when the order is being received.
ORDER PROCESSING FLOW CHART OVERSEAS CUSTOMERS

Overseas Overseas Overseas

Customers Customers Customers

Trading Trading
Seaport Seaport
Houses Houses

International
Trade Division

Production
Plant

Information Flow:-

Overseas customer => Trading Houses => International Trade Division => Production Plant

Material Flow:-

Production Plant => Seaport => Overseas customer

VARIOUS TERMS USED IN EXPORT:

The international rules that are accepted by governments, legal authorities and practitioners
worldwide for the interpretation of the most commonly used terms in international trade are called
Incoterms. They either reduce or remove altogether uncertainties arising from differing
interpretations of such terms in different countries. Incoterms 2000 describe the responsibilities of
seller and buyer in international trade.
 EXW (EX WORKS)
 FCA (FREE CARRIER)
 FAS (FREE ALONGSIDE SHIP)
 FOB (FREE ON BOARD)
 CFR (COST AND FREIGHT)
 CIF (COST, INSURANCE AND FREIGHT)
 CPT (CARRIAGE PAID TO)
 CIP (CARRIAGE AND INSURANCE PAID TO)
 DAF (DELIVERED AT FRONTIER)
 DES (DELIVERED EX SHIP)
 DEQ (DELIVERED EX QUAY)
 DDU (DELIVERED DUTY UNPAID)
 DDP( DELIVERED DUTY PAID)

EXW – EX WORKS “Ex works” means the seller’s only responsibility is to make the goods
available at the seller’s premises, i.e., the works or factory. The seller is not responsible for loading
the goods on the vehicle provided by the buyer unless otherwise agreed. The buyer bears the full
costs and risk involved in bringing the goods from there to the desired destination. Ex works
represents the minimum obligation of the seller.

FCA - FREE CARRIER (... named place) This term has been designed to meet the requirements
of multimodal transport, such as container or roll-on, roll-off traffic by trailers and ferries. It is
based on the same name principle as F.O.B. (free on board), except the seller fulfills its obligations
when the goods are delivered to the custody of the carrier at the named place. If no precise place
can be named at the time of the contract of sale, the parties should refer to the place where the
carrier should take the goods into its charge. The risk of loss or damage to the goods is transferred
from seller to buyer at that time and not at the ship's rail. The term "carrier" means any person by
whom or in whose name a contract of carriage by road, rail, air, sea, or a combination of modes
has been made. When a seller has been furnished a bill of lading, way bill or carrier's receipt, the
seller duly fulfills its obligation by presenting such a document issued by a carrier.

FAS - FREE ALONGSIDE SHIP (... named port of shipment) "F.A.S." or "free alongside ship"
requires the seller to deliver the goods alongside the ship on the quay. From that point on, the
buyer bears all costs and risks of loss and damage to the goods. Unlike F.O.B., F.A.S. requires the
buyer to clear the goods for export and pay the cost of loading the goods.

FOB - FREE ON BOARD (... named port of shipment) Under "F.O.B." or "free on board," the
goods are placed on board the ship by the seller at a port of shipment named in the sales agreement.
The risk of loss of or damage to the goods is transferred to the buyer when the goods pass the ship's
rail (i.e., off the dock and placed on the ship). The seller pays the cost of loading the goods.

CFR - COST AND FREIGHT (... named port of destination) "CFR" requires the seller to pay
the costs and freight necessary to bring the goods to the named destination, but the risk of loss or
damage to the goods, as well as any cost increases, are transferred from the seller to the buyer
when the goods pass the ship's rail in the port of shipment. Insurance is the buyer's responsibility.

CIF - COST, INSURANCE AND FREIGHT (... named port of destination) "CIF" is CFR. with
the additional requirement that the seller procure transport insurance against the risk of loss or
damage to goods. The seller must contract with the insurer and pay the insurance premium.
Insurance is generally more important in international shipping than domestic shipping, because
U.S. laws generally hold a common carrier to be liable for lost or damaged goods.

CPT - CARRIAGE PAID TO (... named place of destination) This term means the seller pays
the freight for the carriage of the goods to the named destination. The risk of loss or damage to the
goods and any cost increases transfers from the seller to the buyer when the goods have been
delivered to the custody of the first carrier, and not at the ship's rail. Accordingly, "freight/carriage

CIP - CARRIAGE AND INSURANCE PAID TO (... named place of destination) This term is
the same as "freight/carriage paid to (CPT)" but with the additional requirement that the seller has
to procure transport insurance against the risk of loss or damage to the goods during the carriage.
The seller contracts with the insurer and pays the insurance premium.

DAF - DELIVERED AT FRONTIER (... named place) "Delivered at frontier" means that the
seller's obligations are fulfilled when the goods have arrived at the frontier but before the customs
border of the country named in the sales contract. The term is primarily used when goods are
carried by rail or truck. The seller bears the full cost and risk in delivering the goods up to this
point, but the buyer must arrange and pay for the goods to clear customs.

DES - DELIVERED EX SHIP (... named port of destination) Means the seller shall make the
goods available to the buyer on board the ship at the place named in the sales contract. The seller
bears the full cost and risk involved in bringing the goods there. The cost of unloading the goods
and any customs duties must be paid by the buyer.

DEQ - DELIVERED EX QUAY (... named port of destination) Means the seller has agreed to
make the goods available to the buyer on the quay or the wharf at the place named in the sales
contract. The seller bears the full cost and risks in delivering the goods to that point including
unloading.

DDU - DELIVERED DUTY UNPAID (... named place of destination) Under these terms, the
seller fulfills his obligation to deliver when the goods have been available to the buyer uncleared
for import at the point or place of the named destination. The seller bears all costs and risks
involved in bringing the goods to the point or place of named destination. There is no obligation
for import clearance.

DDP - DELIVERED DUTY PAID (... named place of destination) represents the seller's
maximum obligation. The term "DDP." is generally followed by words indicating the buyer's
premises. It notes that the seller bears all risks and all costs until the goods are delivered. This term
can be used irrespective of the mode of transport. If the parties wish to make clear that the seller
is not responsible for certain costs, additional word should be added (for example, "delivered duty
paid exclusive of VAT and/or taxes").

Among these incoterms only four of them are used in SAIL for export:

1. FOB (Free On Board)

2. C & F CFR (Cost and Freight)
3. CIF (Cost, Insurance and Freight)
4. FCA (Free on Carrier)

Free on board price (FOB)

On receipt of the contract from the head office the plant manufactures the product as per the
specifications mentioned in the contract. These goods are then transported via railways or
roadways as mentioned in the contract to the Vizag port from where the goods are loaded into the
ships and exported abroad. In this type of pricing the cost of transporting to the port and loading
into the ship is borne by the seller i.e. I this case by Bhilai Steel Plant. Other charges such as the
cost of freight, insurance etc. are borne and arranged by the buyer.

Thus FOB includes:- COST OF PRODUCTION +COST OF TRANSPORTATION TO THE

PORT +HANDLING CHARGES

Insurance and other charges are paid by the buyer.

Cost and Freight Price (CFR)

The plant on the basis of specifications stated in the contract, makes the goods and passes the
goods along with the required documents to the port from where the goods are forwarded to the
overseas market. In CFR or C & F pricing cost of the transportation to the port, loading charges,
charges of freight and ship etc. are paid by the seller i.e., the plant and it is added to the total cost
of production.

Cost, Insurance and Freight (CIF)

As indicated by the name itself the cost of transporting, loading, shipment including insurance is
paid by the seller and then charged to the total cost of production.

Thus CIF pricing includes: Cost of production + Cost of transportation to the port + Handling
charges + Loading charges + Ocean freight + Other expenses.

Insurance is done by the buyer.

Free on Carrier (FCA)

The pricing is particularly levied on those good which goes out of the country through roadways,
e.g., export to Nepal is done through roadways. While fulfilling the contract made by SAIL with
Nepalese customers, the plant prepares the goods as per specification of the contract. These goods
are then dispatched to the plant’s stockyard at Patna, Kanpur or Bhilai. The customers collect their
orders from these stockyards and it via roadways to their destination. FCA is quite similar to the
FOB. In FCA, the cost of transportation to the stockyard and loading of goods is borne by the seller
i.e., the plant, the other expenses and responsibilities lies on the customers.

Thus FCA includes: Cost of production + Transportation to the stockyard + Loading and handling
charges.

Insurance is paid by the buyer.

Delivered at Place (DAP)

The seller pays for transport to the specified destination, but the buyer pays the cost of importing
the goods. The seller takes the responsibility for the goods until they are ready to be unloaded by
the buyer.

Delivered at Terminal (DAT)

The seller pays for transport to the specified terminal at the agreed destination. The buyer is
responsible for the cost of importing the goods. The buyer takes responsibility once the goods are
unloaded at the terminal.

Documents Essentials for Exports

Documents essential for export are:-

 Contract Order
 Work Order
 Test Certificate
 AR-4 Form
 Export License from Government

Contract order:-

Contract order includes some essential information about buyer and product such as: Name and
Address of the Buyer, Destination, Description and manufacturing process of the item, Surface
condition, quality, packing, loading instruction, Dispatch to Commence, etc.

Work Order:-

Work order is made after the contract is confirmed and agreement is signed with the buyer. Work
order includes every detail regarding the contract such as work order no, LC no, Name of the
Buyer, Name of the consignee, Name of the Payee, Producing plant, Description of the material,
Work’s Test Certificate, Excise formalities, Loading Instructions, etc.
Test Certificate:-

All the products to be exported have to undergo certain tests to access its quality and reliability.
This certificate has to be certified by Chief Metallurgist. Along with the annexure a work order is
also attached with divides the quality into various types of item size in thickness, width and length,
quality in metric tons divides into various specification and theoretical weight Kg/PC i.e., total
weight in kilos, etc.

Import Export License Foreign Trade Regulation:-

This license is granted under the Foreign Trade Development and Regulation Act 19920 No. 22
of 1992 by Foreign Trade Development Officer (FTDO) and is without prejudice to the application
of any other prohibition or regulation affecting the import / export of the goods which may be in
force at the time of arrival / dispatch.

AR- 4 Form:-

It is an invoice made on the basis of the Railway Receipt at the workstation from where the goods
are located into the train wagons to be transported to Vizag. The Railway Receipt is made before
the goods move out from the station. It is made on the basis of the quality of the goods loaded into
each wagons.

The AR-4 Form is forwarded to the Branch Sales Office at Vizag. There while finally loading the
goods into the ship for export a proof of export is made starting the actual quality of goods loaded
into the ship and the goods damaged in the course of the transporting it via train.

MODES OF PAYMENT:-
The payments from the customer is taken, if all the tems and conditions are fufilled :-

1. Advance Payment
2. Letter of credit
3. Bank Guarantee

Advance payment :- In advance payment, the customer has to pay the amount at the time of
giving and confirming order. This type of payment is generally used for special orders.
Letter of credit :- In this, the buyer of the product opens a letter of credit in his bank in favor
of the Sail by either paying all the money to the bank or by getting credit limits for the specified
period. Then the company after submitting the documents to his bank can receive payment.

Bank Guarantee :- Bank Guarantee is also a type of payment method in which the bank
guarantees the payment to the supplier on behalf of buyer.
SAMPLE DOCUMENTS
SWOT Analysis:
STRENGTHS:-

 Integrated Steel Plants with their own captive mines of natural resources i.e., raw materials.
 Low cost and efficient labour force.
 Strong managerial capability of SAIL.
 Strong globalized industry and emerging global competitiveness.
 Modern new plants & modernized old plants
 Strong DRI Production base.

WEAKNESSES

 High cost of energy consumption.

 Higher duties and taxes

 Vast infrastructure

 High cost of construction for new plants

 Low quality of coking coal available in India

 Dependence on imports coal for steel manufacturing

 Dependence on imports for steel manufacturing equipments and technology.

OPPORTUNITIES

 Huge infrastructural demand in developing countries and also in developed countries.

 Rapid urbanization and globalization

 Increasing interest of foreign steel producers in India

 Increasing demand for customer durables

 Untapped rural demand. The current use of steel in rural area is only 5%.

THREAT
 Slow growth in infrastructure development.

 market fluctuation

 Global economic slowdown.

 Possibilities of export of steel from china due to their low price.
 Growing competition with JSW, TATA Steel and many other small steel manufactiuring
companies.
RECOMMENDATIONS
SAIL would need to move step by step to remain competitive in the global arena. The following
aspects need to close attention and monitoring:

1. Formation of Service stations: BSP should form its service station throughout India and
abroad to reach the customers all over.
2. Formation of production unit exclusively for exports of specialized as per international
standards.
3. ITD should become more liberal and they should recognize the importance of Joint venture
and internationally located Steel Plants outside the country.
4. SAIL should enhance the transportation techniques and include more types of standard
export procedure.
5. SAIL should provide insurance for the products which are to be exported till they are
delivered to the customers.
6. SAIL should provide more options for payment in international trade.
7. SAIL should take the responsibility of delivering the products securely to the overseas
customers after that they can charge for it.
8. Enhancement in customer services.
9. Promotions should be done in international market for reaching different customers across
the world.
10. Improvement in product quality and supply in tailor made sizes and lots.
11. Efforts directed towards improving productivity of production units.
12. Improving labour productivity through training / Retraining and implementation of self-
discipline and work culture.
13. India has extremely low level of consumption of steel. For example, in construction of a
house even today more wood is being used than steel which is resulting in cutting down of
our valuable forest wealth. The per capita consumption of steel in rural India is a mere 3kg.
The wrong thrust given on export of steel has also resulted in the utter neglect of developing
rural market for steel.
14. SAIL should pay more attention on domestic steel market to fulfill the demand.
15. Pay more attention on energy consumption and high production cost.
16. The quality complaints are increased in 4 sectors of seven majors. BSP should made
technological advancement to improve the quality standards.
17. SAIL should pay more attention on utilization of iron ore, or decides better prices for export
of iron ore.
18. SAIL must make pressure on government to get its autonomy.
Conclusions:
 Implication of new technique required for production to reduce wastage should be
fastened.
 Bhilai steel Plant is always ready for quantity expansion because future demand of steel
in domestic as well as international market can be increase and sometime there is
sudden decrease and increase in demand.
 Bhilai Steel Plant must secure its natural resources for future example mines, water
resources etc. for future demand and expansion.
Bibliography
1. www.sail.co.in (SAIL)
2. SAIL Monthly
3. SAIL CSR Brochure
4. Information collected from various unit of Marketing and Business Planning section of
BSP.