Final Report1

1.
EXECUTIVE SUMMARY
This project – MARKET MAPPING “VAJRA” is about the survey of Flat Steel market
in Rajkot District. Main purpose of this study is to find total sales of Flat Steel
products and to find who uses the steel in Rajkot District. I also have to find out
different applications of steel. In this study, I also have to find out consumption of
steel.
Essar Steel is a global steel company with strong presence in intensive steel
consuming markets in Asia and North America. It is India's largest exporter of flat
steel with 14 MTPA (million tons per annum) of capacity. Essar Steel is fully
integrated from mining to retail and has strong downstream capability with a global
retail capacity of over 3 MTPA.
Essar Hypermart is a pioneering initiative of Essar Steel to make steel available to

end users close to the user point. This has revolutionized steel marketing in the
country. It has set up over 300 retail outlets across the country.
In this report the methodology used is personal interview and snow-balling. As it is

Market Mapping of the total steel consumption of flat steel in Rajkot District of
Gujarat.
• Personal Interview
• Questionnaires
• Snow-Balling
From the market portion for each brand of flat steel is calculated. The sample size
for
number of traders and number of customers is not fixed.
During this survey I found that mostly Chemical companies, Engineering &
Fabrication companies and Pharmaceutical companies are main users of the steel.
and steel industry is under-developed and has large scope to grow.
ESSAR STEEL LTD. Page 1

2. ESSAR GROUP
The Essar Group is a multinational conglomerate corporation in the sectors of Steel,

Energy, Power, Communications, Shipping Ports & Logistics as well as Construction
headquartered at Mumbai, India. The Group's annual revenues were over USD 15
billion in FY08-09.
Essar began as a construction company in 1969 and diversified into manufacturing,

services and retail. Essar is managed by Shri.Shashi Ruia, Chairman – Essar
Group and Shri.Ravi Ruia, Vice Chairman Essar Group.
The Company is divided into 4 divisions as
1. Essar Offshore - It undertakes laying of submarine oil and gas pipelines,

submarine outfalls, underwater rock drilling and blasting and dredging
activities.
2. Essar Energy - This unit is the first of its kind in the private sector to own
and operate super-deep land drilling and rigs. The division was awarded the
World Bank aided contract for operating 4 mobile rigs for drilling oil.
3. Essar Construction - The division specializes in breakwater construction,
ore and oil, berths, Wharfwalls, overground and underground storage silos
etc.
4. Essar Steel - The division manufactures hot briquetted sponge iron.

3. ESSAR STEEL
Essar Steel is a global steel company with strong presence in intensive steel
consuming markets in Asia and North America. It is India's largest exporter of flat
steel with 14 MTPA (million tons per annum) of capacity. Essar Steel is fully
integrated from mining to retail and has strong downstream capability with a global
retail capacity of over 3 MTPA.
Indian operations
Essar Steel is the largest steel producer in western India. With a capacity of 10
MTPA at Hazira, Gujarat. The Essar Steel complex is at Hazira in Gujarat. India has
a complete infrastructure setup, including a captive port, lime plant and oxygen
plant. The company is building a 1.5 MTPA plate mill and a 0.6 MTPA pipe mill in
Hazira the Indian operations also include an 8 MTPA beneficiation plant at Bailadila,
Chhattisgarh, an 8 MTPA pellet complex at Visakhapatnam, a 5.5 MTPA hot
briquetted iron plant in Hazira and a 1.4 MTPA cold rolling complex. Additionally,
Essar is setting up a 12 MTPA pellet plant in Paradip, Orissa.
Global footprint
In 2007, Essar Steel acquired Algoma Steel in Canada, which has a current capacity
of 4 MTPA, and Minnesota Steel, which has iron ore reserves of over 1.4 billion tons.
The company is building a 6 MTPA pellet plant, a concentration plant and a direct
reduced iron plant in Minnesota. In Indonesia, it operates a 400,000 TPA cold rolling
complex with a galvanizing line of 150,000 TPA, making it the largest private steel
company in that country.
Essar Steel is a global producer of steel with a footprint in India, Canada, USA, the
Middle East and Asia. We are a fully integrated flat carbon steel manufacturer —
from iron ore to ready-to-market products with a current capacity of 8.6 million
tonnes per annum (MTPA). With our aggressive expansion plans in India, as well as
Asia and the Americas, we aim to achieve a capacity of 14 MTPA by 2011-12. Our
products find wide acceptance in highly discerning consumer sectors, such as
automotive, white goods, construction, engineering and shipbuilding.

Products and services
Essar Steel is one of India's largest exporters of flat products, exporting to the highly
demanding US and European markets, and to the growing markets of South East
Asia and the Middle East.
A number of major client companies have approved our steel for their use, including
Caterpillar, Hyundai, Swaraj Mazda, the Konkan Railway, and Maruti Suzuki. Essar
Steel has acquired extensive quality accreditations. Our lean team gives us one of
the highest productivities and lowest manpower costs among steel plants
internationally.
Steel production processes
1. Blast furnace/basic oxygen furnace (BF/BOF): BF basically converts iron ore

into liquid form of iron. Iron produced by BF contains high amount of carbon and
other impurities, this iron is called pig iron. Pig iron due to its high carbon content
has limited end use application such as covers of manholes. To make steel products
out of pig iron it is further processed into BOF where its carbon content and other
impurities are burnt or removed through slag separation. Main inputs to BF are iron
ore and coal/coke. BOF is also called oxygen furnace because oxygen is the only
fuel used in the process. Generally, integrated milling use BF/BOF routes to produce
finished steel. Producers that use this technology include SAIL, RINL, TSL and
JSWL.
2. Electric Arc Furnace (EAF): Basic purpose of the EAF is remelting sponge iron,
melting scrap, its main inputs, to produce finished steel. It uses electricity as much
as 400-500 kWh/ton. ISPAT, ESSAR, and the Jindal group are examples of
producers, which use this technology.

3. COREX or Cipcor Process: COREX is an advance process of making steel.
Though few use this process, it is possible to use non-coking coal directly in
smelting work and it also makes it possible to use lump ore and pellets as inputs.
These two advantages allow steel producers to eliminated coking plants and sinter
plants. Purpose of coking plant is to convert non-coking coal into more efficient fuel
and purpose of sinter plant is purify lump ore or pellets for further processing. Basic
inputs to COREX are iron-ore and coal. Jindal Iron & Steel Company (JISCO) uses
COREX technology to produce finished steel.
4. Induction Arc Furnace (IAF): is one of the most advance processes of making
steel. Like EAF it uses electricity as its main fuel. IAF is most environment friendly
and efficient way of producing steel. However, its lack of refining capacity requires
clean products as its inputs. Large numbers of small steel companies use this
technology.

Essar Steel Plants
Bailadilla facility: Iron ore beneficiation
At Bailadilla, where some of the world's richest and finest ore is available, we
have set up a beneficiation plant of 8 MTPA capacity, which ensures the highest
quality iron ore. The iron ore slurry is pumped through a 267 km pipeline (the second
longest in the world) to the pellet plant, yielding advantages in quality, cost and real
time inventory management.
Visakhapatnam facility: Pelletization
The slurry is received at our pellet plant at Visakhapatnam, which has a capacity of 8
MTPA, providing vital raw material for the steel plant at Hazira.
Hazira facility
The Company has its steel complex at Hazira, Gujarat, houses a 5.0 MTPA sponge
iron plant, the world's largest gas-based sponge iron plant in single location. The
plant provides raw materials for our state-of-the-art 4.6 MTPA hot rolled coil (HRC)
plant, the first and largest of India's new generation steel mills. This plant is fed with
inputs from four electric arc furnaces and three casters. The complex's sophisticated
infrastructure includes independent water supply and power, oxygen and lime plants,
a township and a captive port capable of handling up to 8 MTPA of cargo with
modern handling equipment like barges and floating cranes.
Hazira Steel Complex

The company operates the world's largest gas-based hot briquetted iron (HBI) plant
This highly integrated and modern complex consists of the following manufacturing
facilities:
Hot briquetted iron plant
The company operates the world's largest gas-based hot briquetted iron (HBI) plant
with a production capacity of 5.0 million ton per annum (MTPA). The plant uses
state-of-the-art technology, which ensures high quality raw material for the steel

plant. We are one of the world's lowest cost producers of HBI on a per tonne basis.
The plant is supported by a captive power plant of 32 MW.
The salient features of Essar Steel's HBI plant
World's largest gas-based HBI plant

Amongst the lowest per-tonne operating costs
Consistently operating at high capacity
Established customer base in both domestic and export markets
Hazira Pipe Mill
Hazira Pipe Mill is located at Hazira, Gujarat has a combined capacity of 0.6 MTPA
of helical submerged arc welded (HSAW) and longitudinal submerged arc welded
(LSAW) steel pipes along with internal and external coating facilities of up to 2mn
square meters annually. This pipe making facility is backed by external and internal
anti corrosion coating facilities.
Cold rolling complex
At the other end of the value chain, our downstream facilities include a 1.4 MTPA
cold rolling complex, which adds further muscle to our steel making facilities. The
complex comprises two pickling lines of 1.4 MTPA capacity, a reversing mill and a
1.2 MTPA tandem mill, two galvanizing lines of an aggregate capacity of 0.5 MTPA,
a batch annealing furnace of 0.7 MTPA, and a skin pass mill of 1.0 MTPA. This
enables us to get into the genre of products that are tailor-made for the automotive,
white goods, shipbuilding, and agriculture and construction industries - segments
that had been the exclusive domain of a few international manufacturers. Essar now
holds the leadership position in the cold rolling, galvanizing and pre-coated
segments.
Pune, Maharashtra
The company has 0.6 MTPA cold rolling plant, a 0.5 MTPA galvanizing plant, a 0.4
MTPA color coating plant, and a 0.7 MTPA pickling line.
Canada facility: Essar Steel Algoma

Established in 1901, Essar Steel Algoma is an integrated steel producer based in
Sault Ste. Marie, Ontario, Canada. The plant's current production capacity is 4
MTPA. Some of the key equipment at the plant include a low-cost, technologically
advanced Direct Strip Production Complex (DSPC), a slabcaster, a 106-inch strip
mill (one of the widest in North America), a 166-inch plate mill, a cold mill and
blanking facility that helps produce steel customized for client requirements, and a
welded beam division.
Indonesia facility: PT Essar Indonesia

PT Essar is Indonesia's largest private sector flat products company, with a domestic
market share of 35 percent and a history of process and product innovation. After a
major expansion drive, its CR capacity has been enhanced to 0.4 MTPA and its
newly set up galvanizing capacity is 0.15 MTPA.

4. PRODUCTION PROCESS
Heat treatment
There are many types of heat treating processes available to steel. The most
common are annealing and quenching and tempering. Annealing is the process of
heating the steel to a sufficiently high temperature to soften it. This process occurs
through three phases: recovery, recrystallization, and grain growth. The temperature
required to anneal steel depends on the type of annealing and the constituents of
the alloy.
Quenching and tempering first involves heating the steel to the austenite phase,
then quenching it in water or oil. This rapid cooling results in a hard and brittle
martensitic structure. The steel is then tempered, which is just a specialized type of
annealing. In this application the annealing (tempering) process transforms some of
the martensite into cementite or spheroidite to reduce internal stresses and defects,
which ultimately results in a more ductile and fracture-resistant metal.
Steel production
Iron ore pellets for the production of steel. When iron is smelted from its ore by
commercial processes, it contains more carbon than is desirable. To become steel, it
must be melted and reprocessed to reduce the carbon to the correct amount, at
which point other elements can be added. This liquid is then continuously cast into
long slabs or cast into ingots. Approximately 96% of steel is continuously cast, while
only 4% is produced as cast steel ingots. The ingots are then heated in a soaking pit
and hot rolled into slabs, blooms, or billets. Slabs are hot or cold rolled into sheet
metal or plates. Billets are hot or cold rolled into bars, rods, and wire. Blooms are hot
or cold rolled into structural steel, such as I-beams and rails. In modern foundries
these processes often occur in one assembly line, with ore coming in and finished
steel coming out. Sometimes after steel’s final rolling it is heat treated for strength,
however this is relatively rare.

Hot rolling
Hot rolling is a metalworking process that occurs above the recrystallization

temperature of the material. After the grains deform during processing, they
recrystallize, which maintains an equiaxed microstructure and prevents the metal
from work hardening. The starting material is usually large pieces of metal, like semi-
finished casting products, such as slabs, blooms, and billets. If these products came
from a continuous casting operation the products are usually fed directly into the
rolling mills at the proper temperature. In smaller operations the material starts at
room temperature and must be heated. This is done in a gas- or oil-fired soaking pit
for larger workpieces and for smaller workpieces induction heating is used. As the
material is worked the temperature must be monitored to make sure it remains
above the recrystallization temperature. To maintain a safety factor a finishing
temperature is defined above the recrystallization temperature; this is usually 50 to
100 °C (122 to 212 °F) above the recrystallization temperature. If the temperature
does drop below this temperature the material must be re-heated before hotter
rolling.
Hot rolled metals generally have little directionality in their mechanical properties and
deformation induced residual stresses. However, in certain instances non-metallic
inclusions will impart some directionality and workpieces less than 20 mm (0.79 in)
thick often have some directional properties. Also, non-uniformed cooling will induce
a lot of residual stresses, which usually occurs in shapes that have a non-uniform
cross-section, such as I-beams and H-beams. While the finished product is of good
quality, the surface is covered in mill scale, which is an oxide that forms at high-
temperatures. It is usually removed via pickling or the smooth clean surface process,
which reveals a smooth surface. Dimensional tolerances are usually 2 to 5% of the
overall dimension.
Hot rolling is used mainly to produce sheet metal or simple cross sections, such as
rail tracks.

Cold rolling
Cold rolling occurs with the metal below its recrystallization temperature (usually at
room temperature), which increases the strength via strain hardening up to 20%. It
also improves the surface finish and holds tighter tolerances. Commonly cold-rolled
products include sheets, strips, bars, and rods; these products are usually smaller
than the same products that are hot rolled. Because of the smaller size of the
workpieces and their greater strength, as compared to hot rolled stock, four-high or
cluster mills are used. Cold rolling cannot reduce the thickness of a workpieces as
much as hot rolling in a single pass.
Cold-rolled sheets and strips come in various conditions: full-hard, half-hard,

quarter-hard, and skin-rolled. Full-hard rolling reduces the thickness by 50%, while
the others involve less of a reduction. Quarter-hard is defined by its ability to be bent
back onto itself along the grain boundary without breaking. Half-hard can be bent
90°, while full-hard can only be bent 45°, with the bend radius approximately equal to
the material thickness. Skin-rolling, also known as a skin-pass, involves the least
amount of reduction: 0.5-1%. It is used to produce a smooth surface, a uniform
thickness, and reduce the yield-point phenomenon (by preventing Luder bands from
forming in later processing). It is also used to break up the spangles in galvanized
steel. Skin-rolled stock is usually used in subsequent cold-working processes where
good ductility is required.
Other shapes can be cold-rolled if the uniform is relatively uniform and the
transverse dimension is relatively small; approximately less than 50 mm (2.0 in).
This may be a cost-effective alternative to extruding or machining the profile if the
volume is in the several tons or more. Cold rolling shapes requires a series of
shaping operations, usually along the lines of: sizing, breakdown, roughing, semi-
roughing, semi-finishing, and finishing.

Galvanizing
Hot dip galvanizing is the process of applying a zinc coating to fabricated iron or
steel material by immersing the material in a bath consisting primarily of molten zinc.
The simplicity of the galvanizing process is a distinct advantage over other methods
of providing corrosion protection. The automotive industry depends heavily on this
process for the production of many components used in car manufacturing.
Galvanizing forms a metallurgical bond between the zinc and the underlying steel or
iron, creating a barrier that is part of the metal itself.
Process of galvanizing
The process of hot-dip galvanizing results in a metallurgical bond between zinc and
steel with a series of distinct iron-zinc alloys. The resulting coated steel can be used
in much the same way as uncoated. Galvanized steel can be welded; however, one
must exercise caution around the resulting zinc fumes. Galvanized steel is suitable
for high-temperature applications of up to 392 °F (200 °C). The use of galvanized
steel at temperatures above this will result in peeling of the zinc at the intermetallic
layer. Galvanized sheet steel is often used in automotive manufacturing to enhance
the corrosion performance of exterior body panels.
Lead is often added to the molten zinc bath to improve the fluidity of the bath (thus
limiting excess zinc on the dipped product by improved drainage properties), helps
prevent floating dross, makes dross recycling easier and protects the kettle from
uneven heat distribution from the burners. Lead is either added to primary Z1 Grade
Zinc or already contained in used secondary zinc. A third, declining method is to use
low Z5 Grade Zinc.
Steel strip can be hot-dip galvanized in a continuous line. Hot-dip galvanized steel
strip (also sometimes loosely referred to as galvanized iron) is extensively used for
applications requiring the strength of steel and resistance to corrosion. Applications
include: roofing and walling, safety barriers, handrails, consumer appliances and
automotive body parts. One common use is in metal pails. They are also used in
most heating and cooling duct systems in buildings

Individual metal articles, such as steel girders or wrought iron gates, can be hot-dip
galvanized by a process called batch galvanizing. Other modern techniques have
largely replaced hot-dip for these sorts of roles. This includes electrogalvanizing,
which deposits the layer of zinc from an aqueous electrolyte by electroplating,
forming a thinner and much stronger bond.
PPGI
PPGI is prepainted galvanized steel, also known as precoated steel, coil coated
steel, color coated steel etc.
A galvanized steel sheet in coil form is cleaned, pretreated, applied with various
layers of organic coatings which can be paints, vinyl dispersions, or laminates.
These coatings are applied in a continuous process known as Coil Coating.
The steel thus produced in this process is a prepainted, prefinished ready to use
material. PPGI is the material which uses galvanized steel as the basic substrate
metal. There could be other substrates such as aluminum, Galvalume, stainless
steel, etc.
Over 10 million tons of such coated steel is produced today in over 300 coating lines
all over the world.

5. FLAT STEEL PRODUCTS
Hot Rolled Products – Coils
Essar Steel's produces the finest quality of Hot rolled coils in raw as well as pickled
and oiled form.
Used for
Transport Industry
Welded Steel Tubes and Pipes
Cold - Rolling and Drawing
Line Pipe
Corrosion Resistance
Boiler Quality Plates
Tin Mill Black Plate
Pressure Vessels
HOT ROLLED – Plates
Essar Steel's high precision shearing line (SMS-USA) produces top quality steel
plates that meet demanding international standards. Essar Steel is the only Indian
company to receive the prestigious TUV Rhineland certificate for quality plates.
Essar caters to the plates demand from the following broad market segments
Used for
Boiler & Pressure Vessels
Ship Building
Railways
Heat Exchangers
Oil & Petrochemicals
Marine Containers
Oil & Petrochemicals
Coal & Mining
General & Heavy Engineering

Hot Rolled Products – Sheets
Essar Steel's high precision shearing line (Bronx-UK) turns out top quality steel
sheets meeting demanding international standards.
It caters to the sheets demand from the following broad market segments:
Used for
LPG Cylinder Fabricators
Railways
Automobiles
Marine Freight Containers
General and Heavy Engineering
Hot Rolled Products - Shot Blasted and Primed
Shot blasted and painted steel from Essar offer the cleanest surfaces and a
comprehensive environment protection to its steel. The ideal steel for use in extreme
applications, shot blasted and painted steel from Essar is India's first ever in its
category.
Used for
Welded Beams
Ship Building
Bridge Girders
Component Fabrications
Cold Rolled Products
Hot rolled coils from Essar Steel are used to produce cold rolled products in the
coils/ plates and sheets form. A smoother surface finish, improved tensile strength,
and customized product thickness can be achieved through cold rolling.

Used for
Automotive Body & Components
Drums & Barrels
White Goods
Pipes & Tubes
Furniture & Office Equipment
General Engineering Application
Galvanised Products
Essar Steel now offers the best of breed galvanized products with the highest level
of customization. The products are available in the widest range of surface finishes,
thickness and corrugation levels.
Used for
Construction
Corrugated Sheets
Agriculture Equipment
Automotive Applications
General Engineering Applications
White Goods
Color Coating

PPGI
Applications
Roof, Wall cladding and other building products
Household appliances
Furniture
Automotives

6. STEEL PRODUCERS
Broadly there are two types of producers in India viz. integrated producers and
secondary producers. Integrated steel producers have traditionally integrated steel
units have captive plants for iron ore and coke, which are main inputs to these units.
Currently there are three main integrated producers of steel namely Steel Authority
of India Limited (SAIL), Tata Iron and Steel Co Ltd (TISCO) and Rashtriya Ispat
Nigam Ltd (RINL). SAIL dominates amongst the three owing to its large steel
production capacity plant size.
Secondary producers use steel scrap or sponge iron/direct reduced iron (DRI) or hot
briquetted iron (HBI). It comprises mainly of Electric Arc Furnace (EAF) and
Induction Furnace (IF) units, apart from other manufacturing units like the
independent hot and cold rolling units, rerolling units, galvanizing and tin plating
units, sponge iron producers, pig iron producers, etc. Secondary producers include
Essar Steel Ltd., Ispat Industries Ltd., and JSW Steel Ltd. There are 120 sponge
iron producers; 650 mini blast furnaces, electric arc furnaces, induction furnaces and
energy optimizing furnaces; and 1,200 re-rollers in India.
The integrated producers constitute most of the mild steel production in India. Their
main products include flat steel products such as Hot Rolled, Cold Rolled and
Galvanized steel. They also produce long and special steel in small quantities. On
the other, secondary producers largely produce long steel products.
Re-rollers are the units that come under secondary producers’ category, and
produce small quantity of steel like long and flat products. These units either procure
their inputs from the market or through their backward integrated plants. They use
sponge iron, pig iron or combination to produce finished steel or ingots.

7. TYPES OF STEEL
Steel is an iron based mixture containing two or more metallic and/or non-
metallic elements usually dissolving into each other when molten. Since it is an iron
based alloy—as per its end use requirements—other than iron it may contain one or
more other elements such as carbon, manganese, silicon, nickel, lead, copper,
chromium, etc. Steel is produced using Steel Melting Shop that includes converter,
open hearth furnace, electric arc furnace and electric induction furnace.
There are broadly two types of steel according to its composition: alloy steel and
non-alloy steel. Alloying steel is produced using alloying elements like manganese,
silicon, nickel, chromium, etc. Non-alloy steel has no alloying component in it except
that are normally present such as carbon. Non-alloy steel is mainly of three types
viz. mild steel (contains up to 0.3% carbon), medium steel (contains between 0.3-
0.6% carbons) and high steel (contains more than 0.6% carbon). All types of steel
other than mild steel are called special steel. It is mainly because a special care is
taken in order to maintain particular level of chemical composition in such steel. This
process gives different properties to the steel according to its composition. In India,
non-alloying steel constitutes about 95 percent of total finished steel production, and
mild steel has large share in it.
According to shape/size/form steel is categorized into different types such as liquid

steel, ingots, semis (semi-finished steel) and finished steel. Liquid steel is a first
product that comes out from Steel Melting Shop. Liquid steel further goes into ingots,
and then ingots advance to semis. Semis are called semi-finished steel products
because they are further subject to forging/rolling in order to produce finish steel
products such as flat steel products and long steel products. Crude steel generally
includes ingots and semis.
According to end use, steel is categorized into structural steels, construction steel,
deep drawing Steel, forging quality, rail steel, etc. The following chart depicts
various types of steel products according to different categories.

Chart 2.1: Categories/types of steel products
Production
During the last five years finished steel production (alloy and non-alloy) grew at the
rate of 8 percent (CAGR) to reach at 57.66 mt in 2006-07 from 39.22 mt in 2002-03.
In 2006-07, the secondary producers alone contributed about 76 percent and the
rest came from the main producers.
After liberalization, on the account of active participation of private sector in the steel
industry, public sector share in the total production started dwindling. In 2003-04,
share of public sector in the finished steel production (alloy & non-alloy) was 28
percent, which was reduced to 23 percent in 2006-07.
According to estimates of Ministry of Steel, Government of India—production

capacity of the steel industry will be 124 mt at the end of the year 2011-12. It is
mainly attributed to positive trends in the consumption. Main producers such as
TISCO, SAIL and JSW are aggressively investing in expanding their plant
capacities. TISCO has an installed production capacity of 7.5 to 8 mt with another
2.4 mt would be added by 2009. The TISCO is the front runner with an expansion

plan of about 30 mtpa by 2020. JSW and SAIL have expansion plans of about 27
mtpa and 24 mtpa, respectively.
Share of main and secondary producers in total finished steel production

(alloy and non-alloy)
120
Main Producers Secondary
100
80
Segment-wise production of finished steel (non-alloy) (in ‘000 tonnes)
Segment
HR Coils
60
2002-03
8385
2003-04
8757
2004-05
9215
2005-06
9515
2006-07
11181
CR Coils/Sheets 3366 3557 3485 3989 4322
GP/GC Sheets 2790 3130 3672 3782 4391
Plates 1832 2182 2575 2974 3342
40
20
0
2003-04 2004-05
Producer-wise production of HR coils/sheets (in ‘000 tonnes)
Producers/Year 2003-04 2005-06

SAIL 4648 (36) 4830.4 (31)
TSL 2846 (22) 3030 (19)
JSW steel Ltd. 1300 (10) 2148 (14)
ESSAR 1700 (13) 2580 (16)
ISPAT 1500 (12) 2143 (14)
Other Secondary 985 (8) 1052 (7)
Total 12979(100) 15783.4 (100)
Producer-wise production of steel CR coils/sheets (in ‘000 tonnes)
Others
Year TSL SAIL ESSAR JSWL ISPAT secondary Total
producers
2002-03 854 912.6 1599.4 3366
2003-04 826.2 942.2 1788.6 3557
2004-05 919.9 923.1 0 355 0 1287 3485
2005-06 988.4 929.4 298 269 844 660.2 3989
2006-07 1003 933.2 859 295 846 385.8 4322
Producer-wise production of steel GP/GC sheets (in ‘000 tonnes)
Others
producers
2002-03 363.8 301.8 NA NA NA 2124.4 2790
2003-04 436 338.1 NA NA NA 2355.9 3130
2004-05 525 278.8 0 370 0 2498.2 3672
2005-06 508 298.6 191 232 782 1770.4 3782
2006-07 520.5 292.3 339 301 742 2196.2 4391
Producer-wise production of steel Plates (in ‘000 tonnes)
Others
producers
2002-03 55 1572.4 NA NA NA 204.6 1832

2003-04 89.6 1843.5 NA NA NA 248.9 2182
2004-05 88 2160.2 253 0 0 73.8 2575
2005-06 82 2238.5 523 0 86 44.5 2974
2006-07 69.4 2380.8 638 0 182 71.8 3342
CONSUMPTION
During last five years (2004-05 to 2008-09) the steel consumption has grown by
about 11 percent, which was higher than the estimation of National Steel Policy
2005. Especially in last two years (2007-08 and 2008-09) consumption growth has
been quite impressive, 13.90 percent and 12.91 percent, respectively.
India’s per capita consumption of steel stood at 46 kg, whereas world average is 150
kg. Average for developed world is 450 kg. Thus, it is clear that there is much scope
for the growth of consumption in India. Infrastructure and manufacturing sectors
together contributed almost 50 percent of total demand for the steel in 2008-09.
Figure 2.3: Major consumer of steel in 2008-09 (in %)
8. ESSAR HYPERMART
Essar Hypermart is a pioneering initiative of Essar Steel to make steel available to

end users close to the user point. This has revolutionized steel marketing in the
country. It has set up over 300 retail outlets across the country.
Essar Hypermarts caters to the customers in SME segment ranging from small
manufacturers, local fabricators and general engineering firms to large corporations

and construction companies. It offers a comprehensive range of flat and long steel
products for a variety of applications. The outlet chain provides immediate delivery,
transparent pricing, customized quantities and guaranteed quality to its retail
customers.
Essar Hypermart also arranges for channel financing thru banks to deserving
customers. In fact, Essar Hypermart customers are assured of materials from an
ISO 9002 and 14001 certified mill. Moreover, all the products are available with a
quality test certificate. Essar Hypermarts have a strong pan-India presence. Sales
from the Essar Hypermart currently account for 25 percent of Essar Steel’s annual
revenues.
Essar Steel has plans to further expand its distribution network through
Expressmarts and the Expresspoints. Expressmarts and Expresspoints are dealer
owned – dealer operated outlets and will offer Essar Hypermart products across all
key steel consumption centres.
The distribution model is backed by world class Service Centre facilities and Supply
Chain Management of Essar Steel and make available customized products to
customers at their door step. Customers can now buy steel as per their requirement
with a guarantee for right price, excellent quality and timely delivery from within their
town/city limits.
• India’s first and largest retail chain for steel

• 100 Hypermarts and 400 Expressmarts across India
• Targeted to meet the requirements of SME
• Reach out to Consumption Centers across India
• Build transparency of pricing with end users
• Create a hub & spoke distribution model
• 44,000 sqft with a shed of 6000 sqft & 500 sqft office

DISTRIBUTION MODEL

9. STEEL EXPRESSMART
• Steel Expressmart is a Dealer owned – Dealer operated sales point

• Expressmart Dealership appointed strictly on basis of merit
• Each Expressmart to be attached to the nearest mother Hypermart
• Each Expressmart should have a chain of Expresspoints attached to it
o Defined Territory of operations
• Access to all products sold at Hypermarts
• Around 2500 sq ft of space – including a shed and office

• Located in steel trading area / industrial area
• Established distribution strength
• 2-3 sales staff to be led by Essar Sales Executive
• Sound Investment capacity depending upon the market size
• Exclusivity of business- Stocks and Sells only Essar Steel
• Expansion through Expresspoints
• Ability to meet mutually agreed Quarterly and Annual Targets
• Computer with internet connectivity and adherence to company specified
software
• Adherence to Essar Steel Hypermarts policies from time to time

10. COMPETITORS

11. INTRODUCTION TO MISSION VAJRA
The consumption of steel is increasing day by day and the competition is very tough.
The Essar group wants to map the whole market in order to develop strategies to
capture more market share.
The company has planned out to make their distribution channel more compatible.
The survey is conducted to map the total consumption of steel in whole GUJARAT.
This report contains the survey of RAJKOT District.
The distribution channel for district will be designed according to the results of the
survey.
• 36 locations desired to reach a footprint of 150 Hypermarts pan-India
• Well informed decision making to decide an RO Location
– Be aware of all critical factors that will help steel sales- Why an RO
here?
• Understanding various customer applications of all Steels in the considered

markets- Who are our customer?
• Understand the Steel Segments in the identified locations- What types of

steel does he buy?
• Understanding of the market share positions of various brands in the

considered markets – Whom are we competing with?

OBJECTIVES
• To meet “All” traders of steel in “Every” town of the district & to measure the
“tons” of steel being “Sold” on an average every month.
[Average monthly sales=sales in the last 12 months/12]
• To measure the above “average monthly sales” for Flat segment of steel viz.
HR, CR, GP, GC, PMP
• To meet “All” the steel customers i.e. those who buy steel to use it in making
various other products. To measure the “tons” of steel all such customers
“Buy” –average monthly sale segment vise (HR, CR, GP, GC, and PMP) in
every town of the district.
• To capture the “applications” that “Each” customer uses the steel for.
Example:
Steel Cupboards & Furniture
Steel Containers- Food grain storage
Tawa/Container – Making Gud (Jaggery)
• To measure the sales of each brand sold by every trader in the district &
calculate the trade market share.
• To highlight the locations of Brand Shops like JSW Shoppe, ISPAT Chowks,
etc and measure sales of all such outlets.
• To measure the purchase of each brand bought by every customer in the

district & calculate the customer market share.(Essar, Tata, SAIL, Jindal,
Ispat, Uttam, Bhushan, Others)
To avoid double counting by ensuring that every trader is asked to share his
“RETAIL SALES” (not his purchase). “RETAIL SALES” is the sale made by the
dealer to a CUSTOMER & not the sale made to another trader/dealer.

AREA COVERED

12. MARKETING RESEARCH
Marketing research is the systematic gathering, recording, and analysis of data

about issues relating to marketing of products and services. The term is commonly
interchanged with market research; however, expert practitioners may wish to draw
a distinction, in that market research is concerned specifically with markets,
while marketing research is concerned specifically about marketing processes.
Marketing research is often partitioned into two sets of categorical pairs, either by
target market:
Consumer marketing research, and
Business-to-business (B2B) marketing research
Or, alternatively, by methodological approach:
 Qualitative marketing research, and

 Quantitative marketing research
Marketing research may also be described as the systematic and objective

identification, collection, analysis, and dissemination of information for the purpose
of assisting management in decision making related to the identification and solution
of problems and opportunities in marketing. The goal of marketing research is to
identify and assess how changing elements of the marketing mix impacts customer
behavior.
Role of marketing research (MR)
The task of marketing research is to provide management with relevant, accurate,

reliable, valid, and current information. Competitive marketing environment and the
ever-increasing costs attributed to poor decision making require that marketing

research provide sound information. Sound decisions are not based on gut feeling,
intuition, or even pure judgment.
Marketing managers make numerous strategic and tactical decisions in the process
of identifying and satisfying customer needs. They make decisions about potential
opportunities, target market selection, market segmentation, planning and
implementing marketing programs, marketing performance, and control. These
decisions are complicated by interactions between the controllable marketing
variables of product, pricing, promotion, and distribution. Further complications are
added by uncontrollable environmental factors such as general economic conditions,
technology, public policies and laws, political environment, competition, and social
and cultural changes. Another factor in this mix is the complexity of consumers.
Marketing research helps the marketing manager link the marketing variables with
the environment and the consumers. It helps remove some of the uncertainty by
providing relevant information about the marketing variables, environment, and
consumers. In the absence of relevant information, consumers' response to
marketing programs cannot be predicted reliably or accurately.
Ongoing marketing research programs provide information on controllable and non-
controllable factors and consumers; this information enhances the effectiveness of
decisions made by marketing managers.
Traditionally, marketing researchers were responsible for providing the

relevant information and marketing decisions were made by the managers.
However, the roles are changing and marketing researchers are becoming more
involved in decision making, whereas marketing managers are becoming more
involved with research. The role of marketing research in managerial decision
making is explained further using the framework of the "DECIDE" model:
D
Define the marketing problem
E
Enumerate the controllable and uncontrollable decision factors
C
Collect relevant information

I
Identify the best alternative
D
Develop and implement a marketing plan
E
Evaluate the decision and the decision process
The DECIDE model conceptualizes managerial decision making as a series of six

steps. The decision process begins by precisely defining the problem or opportunity,
along with the objectives and constraints. Next, the possible decision factors that
make up the alternative courses of action (controllable factors) and uncertainties
(uncontrollable factors) are enumerated. Then, relevant information on the
alternatives and possible outcomes is collected. The next step is to select the best
alternative based on chosen criteria or measures of success. Then a detailed plan to
implement the alternative selected is developed and put into effect. Last, the
outcome of the decision and the decision process itself are evaluated.
Marketing research characteristics
First, marketing research is systematic. Thus systematic planning is required at all

the stages of the marketing research process. The procedures followed at each
stage are methodologically sound, well documented, and, as much as possible,
planned in advance. Marketing research uses the scientific method in that data are
collected and analyzed to test prior notions or hypotheses.
Marketing research is objective. It attempts to provide accurate information that

reflects a true state of affairs. It should be conducted impartially. While research is
always influenced by the researcher's research philosophy, it should be free from the
personal or political biases of the researcher or the management. Research which is
motivated by personal or political gain involves a breach of professional standards.
Such research is deliberately biased so as to result in predetermined findings. The
motto of every researcher should be, "Find it and tell it like it is."

Marketing research involves the identification, collection, analysis, and dissemination
of information. Each phase of this process is important. We identify or define the
marketing research problem or opportunity and then determine what information is
needed to investigate It., and inferences are drawn. Finally, the findings, implications
and recommendations are provided in a format that allows the information to be
used for management decision making and to be acted upon directly. It should be
emphasized that marketing research is conducted to assist management in decision
making and is not: a means or an end in itself. The next section elaborates on this
definition by classifying different types of marketing research.

13. RESEARCH METHODOLOGY
In this report the methodology used is personal interview and snow-balling. As it is

Market Mapping of the total steel consumption of flat steel in Rajkot District of
Gujarat.
• Personal Interview
• Questionnaires
• Snow-Balling
From the market portion for each brand of flat steel is calculated. The sample size
for
number of traders and number of customers is not fixed.

14. ANALYSIS AND INTERPRETATION
TRADERS ANALYSIS
PRODUCT-WISE SALES VOLUME
Product Quantity(tonnes)
HRP 719
HRS 165
CRS 886
GP 455.5
GC 399

• A Highest sale is for CR sheets.
• A Lowest sale is for HR sheets.

COMPANY-WISE SALES VOLUME FOR HR PRODUCTS
Company Quantity(tonnes)
Essar 720
Tata 10
Jindal 7
SAIL 20
Ispat 5
Bhushan 0
Uttam 10
Others 112
• A Highest sale is for Essar products.

• A Lowest sale is for Bhushan steels.

COMPANY-WISE SALES VOLUME FOR CR PRODUCTS
Essar 714
Tata 30
Jindal 27
SAIL 20
Ispat 5
Bhushan 0
Uttam 0
Others 95
• A Highest sale is for Essar.

• A Lowest sale is for Bhushan & Uttam steels.

COMPANY-WISE SALES VOLUME FOR GALVANIZED PRODUCTS
Essar 283
Tata 170
Jindal 299
SAIL 27.5
Ispat 10
Bhushan 10
Uttam 10
Others 21.5
• A Highest sale is for Jindal steels.

• A Lowest sale is for Ispat ,Bhushan & Uttam steels.

COMPANY-WISE SALES VOLUME FOR FLAT STEEL PRODUCTS
Essar 1722
Tata 228.5
Jindal 353
SAIL 67.5
Ispat 20
Bhushan 10
Uttam 20.5
Others 236.5

• A Highest sale is for Essar steels.
• A Lowest sale is for Bhushan steels.

TOWN-WISE SALES VOLUME FOR HOT-ROLLED PRODUCTS
Name of the
Quantity(tonnes)
Town
Rajkot 215
Upleta 67
Dhoraji 70
Jetpur 0
Morvi 270
Wankaner 97
Gondal 120
Veraval(Sapar) 45
• A Highest sale is in Morvi City.

• A Lowest sale is in Jetpur.

TOWN-WISE SALES VOLUME FOR COLD-ROLLED PRODUCTS
Name of the
Quantity(tonnes)
Town
Rajkot 363
Upleta 75
Dhoraji 65
Jetpur 10
Morvi 168
Wankaner 92
Gondal 93
Veraval(Sapar) 25
• A Highest sale is in Rajkot City.

• A Lowest sale is in Jetpur.

TOWN-WISE SALES VOLUME FOR GALVANIZED PRODUCTS
Name of the
Quantity(tonnes)
Town
Rajkot 233
Upleta 64
Dhoraji 80
Jetpur 80
Morvi 136
Wankaner 74
Gondal 144
Veraval(Sapar) 20
• A Highest sale is in Rajkot City.
• A Lowest sale is in Veraval(Sapar).

TOWN-WISE SALES VOLUME FOR FLAT STEEL PRODUCTS
Name of the
Quantity(tonnes)
Town
Rajkot 811
Upleta 214.5
Dhoraji 220
Jetpur 91.5
Morvi 589
Wankaner 263
Gondal 359
Veraval(Sapar) 110
• A Highest sale is in Ankleshwar City.

• A Lowest sale is in kapodra.

END CONSUMER ANALYSIS
PRODUCT-WISE CONSUMER PURCHASES
Product Quantity(tonnes)
HRP 147
HRS 93.5
CRS 128.5
GALVA 103
• A Highest consumption is for HR Plates.
• A Lowest consumption is for HR Sheets.

COMPANY-WISE CONSUMER PURCHASES FOR HR PRODUCTS
Essar 203.5
Tata 14
Jindal 0
SAIL 5
Ispat 0
Bhushan 0
Uttam 0
Others 18

• A Highest consumption is for Essar Steel.
• A Lowest consumption is for Uttam,Bhushan,Ispat,Jindal.

COMPANY-WISE CONSUMER PURCHASES FOR CR PRODUCTS
Essar 71.5
Tata 18
Jindal 30
SAIL 0
Ispat 0
Bhushan 0
Uttam 0
Others 19
• A Highest consumption is for Essar.
• A Lowest consumption is for SAIL,Ispat,Bhushan,Uttam.

.
COMPANY-WISE CONSUMER PURCHASES FOR GALVANIZED PRODUCTS
Essar 48
Tata 0
Jindal 35
SAIL 0
Ispat 0
Bhushan 0
Uttam 0
Others 20
• A Highest consumption is for Essar.

• A Lowest consumption is for SAIL,Ispat,Bhushan,Uttam.

COMPANY-WISE CONSUMER PURCHASES FOR FLAT STEEL PRODUCTS
Essar 323
Tata 32
Jindal 65
SAIL 5
Ispat 0
Bhushan 0
Uttam 0
Others 57
• A Highest consumption is for Essar Steel.

• A Lowest consumption is for Ispat,Bhushan,Uttam.

TOWN-WISE CONSUMER PURCHASES FOR HR PRODUCTS
Name of the
Quantity(tonnes)
Town
Rajkot 33
Upleta 5
Dhoraji 5
Jetpur 0
Morvi 77
Wankaner 63
Gondal 52.5
Veraval(Sapar) 5
• A Highest consumption is in Morvi.
• A Lowest consumption is for Jetpur.

TOWN-WISE CONSUMER PURCHASES FOR CR PRODUCTS
Name of the
Quantity(tonnes)
Town
Rajkot 46
Upleta 1
Dhoraji 10
Jetpur 0
Morvi 10
Wankaner 23
Gondal 33.5
Veraval(Sapar) 5
• A Highest consumption is in Rajkot.

TOWN-WISE CONSUMER PURCHASES FOR GALVANIZED PRODUCTS
Name of the
Quantity(tonnes)
Town
Rajkot 58
Upleta 5
Dhoraji 0
Jetpur 0
Morvi 2
Wankaner 15
Gondal 23
Veraval(Sapar) 0
• A Highest consumption is in Rajkot city.

• A Lowest consumption is for Jetpur,Dhoraji,Veraval(Sapar).

TOWN-WISE CONSUMER PURCHASES FOR FLAT STEEL PRODUCTS
Name of the
Quantity(tonnes)
Town
Rajkot 137
Upleta 11
Dhoraji 15
Jetpur 0
Morvi 89
Wankaner 101
Gondal 109
Veraval(Sapar) 10
• A Highest consumption is in Rajkot.

15. FINDINGS AND CONCLUSION
During a survey, it was found that the sell is very high in Rajkot district.
There are mostly Automobile companies, Engineering & Fabrication companies are
users of the steel.
Most of the Traders are located in Rajkot city and they are selling steel not just in
Rajkot District but also in Junagadh District, Porbandar District, and Jamnagar
District.
Many of small consumers and some of big companies are asking for the credit
purchase in bulk.
Many of big companies are having purchase through their Head-offices, which are
located mostly outside the Rajkot District.
The Demand for imported steel is high because it is cheap compared to some of the
branded steel that is produced by Indian steel companies.
Many of Consumers have a problem with the quality of steel provided.
The complaint from traders is that there are not enough credit period from steel
manufacturers and their margin is very low.
There is no market for Hot Rolled coils, Cold Rolled coils, Galvanized coils.

Many consumers are using HR Sheets instead of CR Sheets due to its low cost
compared to CR sheets.
The Demand is very high for HOT ROLLED Plates and Lowest for HR sheets.
In Rajkot District, Essar has highest market share.
Sell of Imported steel is average compared to branded steel.
There is a highest selling in Rajkot city because big industrial area is there only.
Consumption of Steel is negligible in all other towns except Morvi in Rajkot district.
Consumers always complain that brand which they want is not available. There is
always been lack of brand loyalty.

16. RECOMMENDATIONS
My first suggestion is that supply of steel should have to increase to meet demand of
consumers. Consumers always complain that quantity which they desire is not
available at a time it is required.
I would like to suggest is that distribution system should be improved so that

consumer can get desired quantity any time, which can help in building trust and
loyalty towards brand.
Steel companies need to improve their Quality of the product because I found that
consumers are not satisfied with quality of steel available in market.
There is a need to add more members into the supply chain so that reach to end
user is more.
Looking at the sales data of Rajkot. I would suggest that ESSAR STEEL should
open its HYPERMART in Morvi also.

17. ANNEXURE
Type of If
Average Monthly Sales
Entity Custome
Date
City/ Company Details of the r
S No of Brands
Town Customer/ Customer/Trader mention Flat
Visit Hot Rolled Cold Rolled Galvanised Plain
Trader Applicati Color Steel
on Coated
HR
Tota CR CR CR Coil Shee Corrugat Gal
HRC HRP HRS l C S Total s ts ed Total PPGI Total Total
1 Name of the company: Essar

Name of the Director/
Proprietor/Partner: Tata
Address: Jindal
SAIL
Ispat
Bhusha
n
Tel No: Uttam
Mobile: Others
Email: Total

18. BIBLIOGRAPHY
1. www.essarsteel.com
2. www.essarhypermart.co.in
3. www.google.co.in
4. en.wikipedia.org
5. www.bcg.com
6. www.ibef.in
7. http://jpcindiansteel.nic.in
8. http://pib.nic.in/feature/feyr2000/fmar2000/f060320002.html
9. http://www.ibef.org/artdispview.aspx?cat_id=487&art_id=18401&in=69
10. www.Indiastat.com
11. www.jpcindiansteel.nic.in
12. www.pib.nic.in.
13. www.steel.nic.in

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1.

Essar Hypermart is a pioneering initiative of Essar Steel to make steel available to

In this report the methodology used is personal interview and snow-balling. As it is

number of traders and number of customers is not fixed.

ESSAR STEEL LTD. Page 1

The Essar Group is a multinational conglomerate corporation in the sectors of Steel,

Essar began as a construction company in 1969 and diversified into manufacturing,

The Company is divided into 4 divisions as

1. Essar Offshore - It undertakes laying of submarine oil and gas pipelines,

ESSAR STEEL LTD. Page 2

ESSAR STEEL LTD. Page 3

Steel production processes

1. Blast furnace/basic oxygen furnace (BF/BOF): BF basically converts iron ore

ESSAR STEEL LTD. Page 4

ESSAR STEEL LTD. Page 6

Bailadilla facility: Iron ore beneficiation

Visakhapatnam facility: Pelletization

Hazira Steel Complex

Hot briquetted iron plant

ESSAR STEEL LTD. Page 7

The salient features of Essar Steel's HBI plant

World's largest gas-based HBI plant

Hazira Pipe Mill

Cold rolling complex

Canada facility: Essar Steel Algoma

ESSAR STEEL LTD. Page 8

Indonesia facility: PT Essar Indonesia

ESSAR STEEL LTD. Page 9

ESSAR STEEL LTD. Page 10

Hot rolling is a metalworking process that occurs above the recrystallization

ESSAR STEEL LTD. Page 11

Cold-rolled sheets and strips come in various conditions: full-hard, half-hard,

ESSAR STEEL LTD. Page 12

ESSAR STEEL LTD. Page 13

ESSAR STEEL LTD. Page 14

Hot Rolled Products – Coils

HOT ROLLED – Plates

ESSAR STEEL LTD. Page 15

Hot Rolled Products - Shot Blasted and Primed

Cold Rolled Products

ESSAR STEEL LTD. Page 16

ESSAR STEEL LTD. Page 17

Roof, Wall cladding and other building products

ESSAR STEEL LTD. Page 18

ESSAR STEEL LTD. Page 19

According to shape/size/form steel is categorized into different types such as liquid

ESSAR STEEL LTD. Page 20

According to estimates of Ministry of Steel, Government of India—production

ESSAR STEEL LTD. Page 21

Share of main and secondary producers in total finished steel production

Producers/Year 2003-04 2005-06

Producer-wise production of steel CR coils/sheets (in ‘000 tonnes)

Producer-wise production of steel GP/GC sheets (in ‘000 tonnes)

Producer-wise production of steel Plates (in ‘000 tonnes)

ESSAR STEEL LTD. Page 23

Figure 2.3: Major consumer of steel in 2008-09 (in %)

Essar Hypermart is a pioneering initiative of Essar Steel to make steel available to

ESSAR STEEL LTD. Page 24

• India’s first and largest retail chain for steel

ESSAR STEEL LTD. Page 25

ESSAR STEEL LTD. Page 26

• Steel Expressmart is a Dealer owned – Dealer operated sales point

• Around 2500 sq ft of space – including a shed and office