Professional Documents
Culture Documents
1
Himanshu Shrivastava Pooja Kumari Kumar Samudra Gupta Kaushik Ranveer Singh
2
Mission Statement
3
4
Steel Industry
5
Mission & Vision Statement
Mission Statement
Vision Statement
6
Steel Industry Overview
10
11
Board of Directors and Authority
12
Organization Structure
Managing Director
Logistics
13
Concept of Human Resource Management
14
Training BPSL Scheme
Human Resource
Initiative
16
Work Culture
17
Performance
Evaluation
Performance Evaluation
18
Remuneration & Reward
Support for Objective
Policy
Transparency
Internal Equity
External Equity
Flexibility
Performance Driven Remuneration
Affordable & Sustainable
19
Training &
Development
Training External Training
In House Training & Development (Overseas Training
Program)
Input
Process
Performance
Productivity
20
Corporate Social
Hospital & Health
Responsibility House Keeping
Care Program Facility
Control Of Air
Environmental
Pollution
Concern
Control of Water
Pollution
21
HR Case
Syndicate Bank Ltds chairman and managing director is alleged to
have received bribes to sanction loans. Bhushan Steel is one of the
companies named in this probe. Singhal was arrested on 7 August
Threat call charge on Bhushan Steel Ltd.
22
23
PESTLE
P- political
E-economical
S- social
T-technological
L-legal
E-environmental
24
Political Economical
25
Michael Porters 5 Forces
26
Threat of Substitute
It is medium to low
Barriers to entry
It is low
Bargaining power of Following are the factors that vindicates Bargaining power of buyers
Supplier Capital Requirement: Steel industry is a capital intensive
Buyers have low bargaining
business
The bargaining power of power
Economies of scale:
suppliers is low for the fully Lowering the costs
integrated steel plants (their Better bargaining power while sourcing raw materials
own mines of key raw material Government Policy
like iron ore coal) Product differentiation
low barriers in terms of product differentiation
Threat of rivalry
27
28
Segmentation
1.Purchasing approaches
Purchasing Function Organization: Serve the company with
highly centralized purchasing organization
Nature of existing relationship: Serve companies with
which they have strong relationship
2. Situational factor
Size or Order: Focus on Large orders
29
Targeting
Automotive Industries
White Goods Industries (LG, Samsung)
PSUs ( NALCO, NMDC)
30
Marketing Mix
31
Product
Steel coils
GP Sheets
Corrugated Sheets
Cold Rolled Sheets
Narrow CR coils
32
Products
33
Products
34
Products
35
Products
36
Price
Factors influencing pricing strategy of BSL are:
Production cost
Market demand
Govt. regulation
37
Place
Distribution Channel at
BSL
No Payment Payment in
Payment As per
form of LC
Agreement
Totally based on
Delivering on
Projection
Schedule
38
Promotion
Advertisement
Promotion
Direct Marketing
Newspapers
Power& Steel
Magazine of India
39
Packaging
High tensile steel strapping for packaging
40
41
S
Strength Opportunity
Location advantage Industry growth
O
Availability of its own Iron ore Adaptation towards newer
Integrated values technology
Technology
Growing demand for steel
Weaknesses Threats
Availability of raw materials Up and down of steel price
Low R&D investment Technological change
W Low productivity
Inadequate infrastructure
Power shortage is there at BSL
Price Sensitivity and demand
volatility
International competitors
42
T
P.O.D. P.O.P.
Strong volume
growth and Market driven
backward integration
43
Operation of Bhushan Steel Ltd.
44
45
Reason Behind Khopoli
Plant
Proximity to Alibarg and Candla ports. This helps them to export there
goods easily
Proximity to Mumbai
The company whose capacity is to produce 425000 MT per annum
cannot be set-up in the city. Thus it is well set away from the residential
area but not too far from the market
The Khopoli plant is 6kms away from NALCO
Proximity to river water
Proximity to railway
46
Orissa Plant
47
Reason Behind Sahibabad
Plant
Located near to major automobile and white goods
manufacturing hubs such as Maruti, LG, Samsung and
Honda
48
Distribution Channel at
BSL
No Payment Payment in
Payment As per
form of LC
Agreement
Totally based on
Delivering on
Projection
Schedule
49
Product Imported
Value % of RM cost
Product Name Unit Quantity
Rs crore to Total Cost
HR/CR Steel
>MT 888021 2580.69 79.30
Strips/Sheets/Coil
50
Raw Materials
Iron ore
BSL sources 60-70% of its iron ore requirements from NMDC and the balance is
procured from the spot market
BSL has been allocated Marsua Tirba mines in Keonjhar district, Orissa with
reserves of 70mn tonnes
51
Contd......
Total reserves are estimated to be 650mn tonnes, of which BSL's share will
be 325mn tonnes
In addition, BSL has been allotted the Andal East Coal block in West
Bengal, with estimated reserves of 235mn tonnes, and the Urtan North
coking coal block in Madhya Pradesh, which has an estimated reserves of
55mn tonnes
The company imports its coking coal requirements from Australia and
thermal coal is sourced from Mahanadi coal fields and e-auction
52
Product price increase in 2010
Repercussion- shares were lower by 2.40% at Rs 446.40/-
Prices are going up because of the pressures of increase in raw material prices.
Coking coal prices have gone up by 8% to 10% in the last quarter and even the iron
ore prices are going up. There is no way that the steel company can absorb these
kind of a price increases, so we definitely have to increase the prices of steel. Most
of the companies have increased the prices this month and we have to see how this
behaves in terms of the demand
53
EXPORT
The secondary products are finished products like colour coating coils, colour
coating sheets, corrugated sheets, GP coils etc
Export from PAN India basis and the region wise export per month on an average
is as following:
Gulf 31%
Africa 40%
Europe 10%
Far East 3%
Latin America 13%
In export , two major categories, the break-bulk category and the other is
containerized cargo. One of our major products i.e., API pipes which is produced in
the Khopoli plant, Mumbai is exported in break-bulk from the Bombay port. HR
(hot Rolled) coils which is produced in the Meramandali plant, Orissa is also
exported in break-bulk from the Paradip port
54
Contd.....
We have to keep a minimum of 10,000 MT of cargo in stock which calls for high
inventory cost in comparison with the freight that is being offered to us today and the
rejection rate is moderately high for break bulk cargo. Customers tend to reject about
10% of the commodity on account of unsatisfactory quality or damages etc. So we
try to keep a balance between break-bulk and the containerized cargo.
There was also a turning point of exporting HR coil from the dead port called
Paradip port. About 3 years back we have started exporting HR coils from the Paradip
port
55
Contd......
56
Outsourcing logistic
An ideal logistics company is one that provides consistency in its services and
provides competitive prices
1. Rates/Freight
2. Long Term Relationship
3. Free Days
4. Credit Terms
57
Delivery
Bhushan Steels Management policy is to only work on LC basis(a letter of
credit) whereas other steel manufacturers work on advance basis
Delivery period is 33 days. Within 33 days the commodity irrespective of the
quantity
Most of the steel manufacturers take orders in 1000s, we even take orders for
25 MT. Our aim is to satisfy the needs of our customer
58
Contd....
Under the EPCG scheme, steel companies have to meet the six-year export
obligations in blocks of (4years,2years)
If a company fails to meet the obligation in one block it can carry forward the
deficit to the next two years by paying a penalty. The penalty is the sum of
unfulfilled export obligation and an interest at 15 per cent per year from the date
of clearance of goods. Steel firms say that the penalty is stiff, given the overall
sluggishness in the industry
While the steel companies have increased capacity by over 10 million tonnes
over the past few months led by Tata Steel and JSW Steel commissioning 3
million tonnes per annum each and Bhushan Steel adding 1 mtpa the
industry has sought the Centres intervention in relaxing the norms
59
60
RATIO ANALYSIS
PROFITABILITY
RATIO
61
PROFIT BEFORE INTEREST AND TAX MARGIN
17.82
18.00
16.00
14.00
11.59
12.00 9.85
10.00 7.84
8.33
8.00 6.58
6.00
4.00
2.00
0.00
2014 2015 2016
BHUSHAN STEEL PENNAR INDUSTRIES
62
NET PROFIT MARGIN
0.64
0.00
2014 2015 2016
-5.00
-10.00
-11.77
-15.00
-20.00
-25.00 -24.05
-20.00 -16.17
-30.00
-40.00
-50.00
-60.00
-62.49
-70.00
64
RETURN ON CAPITAL EMPLOYED
20.00 18.21
17.62
18.00
16.00 14.89
14.00
12.00
10.00
8.00
6.00 4.29
4.00 2.69
2.14
2.00
0.00
2014 2015 2016
65
LIQUIDITY & SOLVENCY
RATIO
66
DEBT EQUITY RATIO
10.00 9.36
9.00
8.00
7.00
6.00 4.99
5.00
3.53
4.00
3.00
2.00
0.49 0.52
1.00 0.45
0.00
2014 2015 2016
67
DEBT COVERAGE
RATIO
68
INTEREST COVERAGE RATIO
3.45
3.50
2.82 2.83
3.00
2.50
2.00
1.50
1.06
1.00
0.50
0.50 0.22
0.00
2014 2015 2016
70
DEBTORS TURNOVER RATIO
4.97
5.00
4.45 4.38 4.32
4.50 4.03
4.00 3.63
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
2014 2015 2016
2.50
2.14
2.06
2.00
1.68
1.50
1.00
0.00
2014 2015 2016