Professional Documents
Culture Documents
Presented To: Prof Prakash Pandit Ibs Mumbai 01 SEP 10'
Presented To: Prof Prakash Pandit Ibs Mumbai 01 SEP 10'
• Transport Industry
• Welded Steel Tubes and Pipes
• Cold - Rolling and Drawing
• Line Pipe
• Corrosion Resistance
• Boiler Quality Plates
• Tin Mill Black Plate
The products and its uses in different industries:
▫ Automotive Applications
▫ Corrugated Sheets
▫ White Goods
▫ Agriculture Equipment
▫ Construction
▫ Color Coating
▫ Engineering Applications
Supply analysis
• Essar Steel is a global producer of steel with a footprint covering India,
• Canada, USA, the Middle East and Asia. It is a fully integrated flat
carbon steel manufacturer—from iron ore to ready-to market products.
Essar Steel has a current capacity of 9 million tones per annum
(MTPA). With its aggressive expansion plans in India as well as Asia
and the Americas, its capacity will go up to 20 to 25 MTPA by 2012. Its
products find wide acceptance in highly discerning consumer sectors,
such as automotive, white goods, construction, engineering and
shipbuilding. In 2007, Essar Steel acquired Algoma Steel in Canada,
which has a capacity of 4 MTPA, and
• Minnesota Steel, which has iron ore reserves of over 1.4 billion tones.
While the company is building a 4.1 MTPA steel plant in Minnesota, it
is also setting up a 2 MTPA hot strip mill in Vietnam and a 2.5 MTPA
integrated steel plant in Trinidad & Tobago. 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 competitors
• Major Competitors
• ➢SAIL
➢TISCO
➢JINDAL VIJAY NAGAR STEEL LTD.
➢JISCO
➢SAW PIPES
➢UTTAM STEEL LTD.
➢ISPAT INDUSTRIES LTD.
➢MUKAND LTD.
➢MAHINDRA UJINE STEEL CO.LTD
➢TATA STEEL LTD.
➢USHA ISPAT LTD.
➢KAIYANI STEEL LTD.
➢ELECTRO STEEL CASTING LTD.
• SESA GOA LTD.
➢NMDC
➢LIOYOLS STEEL INDUSTRIES LTD.
Essar Marketing objective
• To create brand image by offering 24 carat quality
steel. Essar is the 1st
• Steel company in the country to brand steel product.
• Marketing Segmentation
• Market segmentation of product is done in Two :-
Regional Market
• Domestic & international market
• South east – 35%
• Europe – 36%
• Middle east – 29%
Existing facilities in India & Abroad
Bailadilla facility: Iron Ore Benefication
• World's richest and finest ore is available
• A beneficiation plant of 8 MTPA capacity
• 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
• The slurry is received at our pellet plant at
Visakhapatnam,
• It has a capacity of 8 MTPA
• providing vital raw material for the steel plant at
Hazira.
Hazira facility
• A 5.0 MTPA sponge iron plant
TMT Bars
Price
• Essar Steel is the market leader in many niche segments in
the domestic markets
• Present market share is 35% for hot & cold rolled products
• Essar is producing the most customized products. Its a
value for money – as said
Essar's promise is Sahi Price, Sahi Delivery and Sahi
Quality, which is all any steel buyer can ask for.
• Price is varies as per the different type & grades steel
product
HR Plates & Sheets – Rs 37/kg;
GP Coils – Rs 44.45/kg to Rs 51/kg
Promotion
• Essar’s advertising policy is non conventional
they always do need base advertisement
• Taking part in Industrial Exhibition
• Sometime useful move of company gives positive
publicity
• They don’t do aggressive advertisement
• Now – a – days mostly promoting their steels
from their Hypermarts
Place
• Production hub as at Hazira, Surat Gujarat
• Overall distribution and Selling Hub is Mumbai
• A complete steel processing plant is located near
to Chennai covering the major auto
manufacturing hub of India
• A different cold rolling plant of 0.4 MTPA in
Pune for the production and distribution of sheet
to the different Electrical durable manufacturers
Distribution Channel
• Essar Hyper mart is the first and largest retail chain for
steel products in India.
• Essar Hyper mart started operation in December 2006.
• Essar Hyper mart, with its pan-India presence is a one-
stop shop for a wide range of flat steel products.
• These Hyper marts stock and sell flat products, which
include hot rolled, cold rolled and galvanized steel sheets
and TMT bars.
• At Essar Hyper mart are assured of materials from an
ISO 9002 and 14001 certified mill. Moreover, these
materials are available with a quality test certificate.
Contd…
• Essar Hyper mart has is a strong network of over 91 Hyper
marts and over 40 Express marts servicing requirements
of small and medium enterprises across the country.
• Company also offers micro finance option.
• Essar Hyper mart has started consumer awareness and
loyalty programme.
• The retail market for steel has been untapped world over.
Small volume, immediate delivery, transparent pricing
and above all consistent and guaranteed quality are just
some of the basic requirements of retail customers.
• Contributed 33 percent to the total sales volume.
• Biggest challenge
• Companies operations at present
Swot Analysis
Strength
Strong International Business
Essar steel is the largest exporter of flat products selling one-third of the production to
the US and European market and to the growing market of south east Asia and middle east.
Thus Essar has a much stronger international reputation then its Indian counterparts.
Technological Leadership .
• Essar’s key strengths stem form the fact that its has mastered the Steel production process.
• It has also adopted and further developed DRI (Direct Reduction Iron) technology which
is the future of steel making (As per Mr. LN Mittal).
• It is the only Indian Steel Company to have mastered both DRI and Corex method of steel
production.
• It’s production is automated to an extent that it employs only 440 persons/mt of steel
produced as against 6250/mt employed by Tata and around 8000/mt employed by SAIL .
Contd..
Integrated production
• The fact that the broader Essar Group has business interests
spanning from Power to Shipping to Oil & Gas and all businesses are
synergistically interwoven helps in lowering the cost of production
and avoid production variances.
• Cost of raw-material is high since Essar don’t have it’s own mines. So , getting Raw-
Material market is costly affair.
• Steel is a capital intensive industry; steel companies in India are charged an interest
rate of around 14% on capital as compared to 2.4% in Japan and 6.4% in USA..
Opportunity
The biggest opportunity before Indian steel sector is that there is
enormous scope for increasing consumption of steel in almost all
sectors in India.
Opportunity
Maximum utilization of cash flow
• This is done through new business & avenues like online sales, steel retail outlets like Essar
hyper mart which is the first and largest retail chain for steel products in India & through
service centers.
• It is estimated that world steel consumption will double in next 25 years. Quality
improvement of Indian steel combined with its low cost advantages will definitely help in
substantial gain in export market.
• Enhancing applications in rural areas assumes a much greater significance now for
increasing per capital consumption of steel. The usage of steel in cost effective manner is
possible in the area of housing, fencing, structures and other possible applications where
steel can substitute other materials.
Threats
Technological changes.
Ever decreasing import duty on steel i.e. high quality of product from developed
countries available for import at very competitive prices.
• High administered price of essential inputs like electricity puts Indian steel industry
at a disadvantage; about 45% of the input costs can be attributed to the administered
costs of coal, fuel and electricity, eg, cost of electricity is 3 cents in the USA as
compared to 10 cents in India;
• Freight cost from Jamshedpur to Mumbai is $50/tonne compared to only $34 from
Rotterdam to Mumbai.
• Added to this are poor quality and ever increasing prices of coking and non-coking
coal.
Thank you
Presented by
Aviral bhardwaj
Arpit vageria
Md. Zeeshan
Abhijeet chatterjee
Nitin tripathi
Piyush kumar