PREFACE

Preparing a project of this nature is an arduous task and I was fortunate enough to get support from a large number o persons. I wish to express my deep sense of gratitude to all those who generously helped in successful completion of this report by sharing their invaluable time and knowledge. It is my proud and previledge to express my deep regards to Respected HOD Dr.Pramesh Gautam, Head of Department of Business Management SVNU, SAGAR for allowing me to undertake this project. I feel extremely exhilarated to have completed this project under the able and inspiring guidance of Mr. Neeraj Topkhane she rendered me all possible help me guidance while reviewing the manuscript in finalising the report. I also extend my deep regards to my teachers , family members , friends and all those whose encouragement has infused courage in me to complete to work successfully.
BRAJESH TAMRAKAR MBA IST SEM.

ACKNOWLEDGEMENT
Preparing a project of this nature is an arduous task and I was fortunate enough to get support from a large number o persons. I wish to express my deep sense of gratitude to all those who generously helped in successful completion of this report by sharing their invaluable time and knowledge. It is my proud and previledge to express my deep regards to Respected , Head of Department Dr.Pramesh Gautam, Department of Business Management , SVNIT, SAGAR for allowing me to undertake this project. I feel extremely exhilarated to have completed this project under the able and inspiring guidance of He rendered me all possible help me guidance while reviewing the manuscript in finalising the report. I also extend my deep regards to my teachers , family members , friends and all those whose encouragement has infused courage in me to complete to work successfully.

BRAJESH TAMRAKAR MBA IST SEM.

DELCLARATION BY THE CANDIDATE

Date : I declare that the project report titled " " on Market Segmentation is nay own work conducted under the supervision of MR. NEERAJ GOUTAM Department of Business Management ,

SVNIT, SAGARTo

the

best of my knowledge the report does not contain any work , which has been submitted for the award of any degree , anywhere.

BRAJESH TAMRAKAR MBA IST SEM.

CERTIFICATE
The project report titled titled "
" been prepared by BRAJESH TAMRAKAR MBA IST Semester , under the

guidance and supervision of MR. NEERAJ TOPKHANE for the partial fulfillment of the Degree of B.B.A.

Signature of the Supervisor

Signature of the Head of the Department

Signature of the Examiner

INTRODUCTION INTRODUCTION

World Iron & Iron industry: An overview

Iron & Iron , the recycled material is one of the top products in the manufacturing sector of the world. The Asian countries have their respective dominance in the production of the Iron all over the world. India being one among the fastest growing economies of the world has been considered as one of the potential global Iron hub internationally. Over the years, particularly after the adoption of the liberalization policies all over the world, the World Iron industry is growing very fast. Iron Industry is a booming industry in the whole world. The increasing demand for it was mainly generated by the development projects that have been going on along the world, especially the infrastructural works and real estate projects that has been on the boom around the developing countries. Iron Industry was till recently dominated by the United Sates of America but this scenario is changing with a rapid pace with the Indian Iron companies on an acquisition spree. In the last one year, the world has seen two big Mergers & Acquisitions deals to take place:

The Mittal Iron , listed in Holland, has acquired the world's largest Iron company called Arcelor Iron to become the world's largest producer of Iron named Arcelor-Mittal.

Tata Iron of India or TISCO (as listed in BSE) has acquired the world's fifth largest Iron company, Corus, with the highest ever stock price. It has been observed that Iron Industry has grown tremendously in the last

one and a half decade with a strong financial condition. The increasing needs of Iron by the developing countries for its infrastructural projects have pushed the companies in this industry near their operative capacity. The most significant growth that can be seen in the Iron Industry has been observed during the period 1960 to 1974 when the consumption of Iron around the whole world doubled. Between these years, the rate at which the Iron Industry grew has been recorded to be 5.5 %. This roaring market saw a phase of deceleration

from the year 1975 which continued till 1982. After this period, the continuous fall slowed down and again started its upward movement from the early 1990s. Iron Industry is becoming more and more competitive with every passing day. During the period 1960s to late 1980s, the Iron market used to be dominated by OECD (Organization for Economic Cooperation and Development) countries. But with the fast emergence of developing countries like China, India and South Korea in this sector has led to slipping market share of OECD countries. The balance of trade line is also tilting towards these countries. The main demand creators for Iron Industry. New innovations are also taking place in Iron Industry for cost minimization and at the same time production maximization. Some of the cutting edge technologies that are being implemented in this industry are thin-slab casting, making of Iron through the use of electric furnace, vacuum degassing, etc. In the year 2004, the global Iron China ranked 1 in the world. production has made a record level by Industry are Automobile industry,

Construction Industry, Infrastructure Industry, Oil and Gas Industry, and Container

crossing the 1000 million tones. Among the top producers in the Iron production,

Indian Iron & Iron Industry

Iron and Iron , is vital to the Indian economy for economic growth and economic well-being. No practical substitutes exist on a large scale for iron and Iron because of the relatively high cost of alternative materials. Worldwide, there are broadly two major categories of Iron playersIntegrated Iron producers (ISPs) and mini-mills/secondary producers, although variations and combinations of the two exist. The key difference between the two is the type of iron bearing feedstock they consume. In an integrated mill, this is predominantly iron ore, with a smaller quantity of Iron scrap. A mini-mill produces Iron uses mainly Iron scrap, or increasingly, other sources of metallic iron such as directly reduced iron (DRI)/hot briquette iron (HBI).

The iron and Iron industry not only directly accounts for about 2% of GDP, it also has a bearing on how the consumer goods and downstream infrastructure sectors develop. Further, with a share of approximately 10%, the sector is amongst the largest contributors to the central excise. India accounted for 3.4% of the estimated world Iron production of 1,129 million tonnes (mt) during 2005. At present, India is the 7th largest crude Iron producing country in the world. In 2006-07, production of Finished (Carbon) Iron was 49.350 million tonnes (Prov). Production of Pig Iron in 2006-07 is estimated to be 4.960 Million Tonnes (Prov). The share of Main Producers (i.e SAIL, RINL and TSL) and secondary producers in the total production of Finished (Carbon) Iron was 35% and 65% respectively during the period of April-December, 2006.

Size of Industry India is among the top 10 global suppliers of Iron in the world. More than 35 million tonnes of Iron is produced in India per annum. India is also the largest producer of sponge iron in the world. This sector represents around Rs. 1 trillion of capital investments, and directly provides employment to around 0.5 million, with the integrated Iron plants accounting for a 40% share. The iron and Iron sector also contributes around 6.2% of Indias

manufactured goods exports and 4.6% of total exports by value.

Structural Characteristics of Indian Iron Industry The industry is dominated by large integrated players like SAIL and Tata Iron in Iron . The Public sector has a significant presence in this industry, Iron Authority of India Ltd. (SAIL) has 32% of Indias installed capacity of crude Iron . Tata Iron and Essar Iron are the major private players in the industry.

The industrys fortunes depend on general global economic conditions but it is particularly sensitive to the performance of the automotive, construction, durable equipment, and other industrial products industries. The trend in the last few years in Iron prices shows that the Iron industry is cyclical.

The global (and Indian) Iron industry losses/profits.

industry also suffers from cycles of over

capacity and shortages. This too leads to cyclically falling/rising prices and

Integrated Iron

producers (ISPs)Tata Iron

and SAILface high fixed

costs, and thus in a downturn, the percentage profit margins come down significantly. The downturn phases have witnessed depressed prices at the firm level and widespread operating losses. Economic logic differs for mini mills that can vary output more quickly when prices fall.

What is Private Limited and Public limited?

Now lets first understand the meaning and difference between Public Sector Company and Private Sector Company. The term Private Company refers to ownership of a business company in two different ways First, referring to ownership by non-governmental organizations; and second, referring to ownership of the company's stock by a relatively small number of holders who do not trade the stock publicly on the stock market. In countries with public trading markets, a privately held business company is generally taken to mean one whose ownership shares or interests are not publicly traded. Often, privately held companies are owned by the company founders and/or their families and heirs or by a small group of investors. Sometimes employees also hold shares of private companies. Most small businesses are privately held. Private companies may be called corporations, limited liability companies, partnerships, sole proprietorships, business trusts, or other names, depending on where and how they are organized.

The term "Public Company" thus refers to a government-owned corporations. and the ownership of assets and interest is shared by people. Normally, the shares of a public company are owned by many investors. However, a company with many shareholders is not necessarily a public company. The shares of a public company are often traded on a stock exchange. The value or "size" of a public company is called its market capitalization It is able to raise funds and capital through the sale of its securities. This is the reason why public corporations are so important: prior to their existence, it was very difficult to obtain large amounts of capital for private enterprises. In addition to being able to easily raise capital, public companies may issue their securities as compensation for those that provide services to the company, such as their directors, officers, and employees.

Private Sector companies in India

The private sector of the Iron Industry is currently playing an important and dominant role in production and growth of Iron industry in the country. During the period (April-December 2006), 20.5 million tonne of Iron was produced by Private Sector Iron units, out of the total production of 33.15 million tonne in the country. The private sector units consist of major Iron producers in one hand and relatively smaller & medium units such as Sponge iron plants, Re-rolling mills, Electric Arc Furnaces and Induction Furnaces on the other. They not only play an important role in production of primary and secondary Iron , but also contribute substantial value addition in terms of quality, innovation and cost effectiveness.

TATA Iron :
Tata Iron is India's largest integrated private sector Iron company. Established in 1907, The Company is backward integrated with owned iron ore mines and collieries. Tata Iron has an integrated Iron plant, with an annual crude Iron making capacity of 5 million tonne, located at Jamshedpur, Jharkhand.

The Iron works is situated at Jamshedpur in the state of Jharkhand, India. The factory covers 800 hectares of land. West Bokaro sub division in Hazaribagh district overs 2000 hectares of land in which mining and coal beneficiation activities are performed. Jharia Division occupies 2500 hectares of land for its industrial, mining and domestic activities in the district of Dhanbad both in the state of Jharkhand. The iron ore and dolomite mines are located at Noamundi in the state of Jharkhand and at Joda, Kalamati, Khondbond and Gomardih in the state of Orissa. Over the years, Tata Iron has emerged as a thriving, nimble Iron enterprise due to its ability to transform itself rapidly to meet the challenges of a highly competitive global economy and commitment to become a supplier of choice. Constant modernization and introduction of state-of-the-art technology at Tata Iron has enabled it to stay ahead in the industry. Tata Iron has completed the first nine months of fiscal 2006-07 with

impressive increase in its production and sales volumes. The hot metal production at 4.1 million tonne is 8.2% more compared to the last year in the corresponding period and crude Iron production at 3.7 million tonne is higher by 7.9% compared to the last year in first three quarters. The saleable Iron production at 3.7 million tonne registered a significant

increase of 11%. The total sales of 3.53 million tonne has grown by 11.7% over last financial year in the corresponding period. The domestic sale of long products has increased by 30%. Tata Iron is continuing with its programme of expansion of Iron making

capacity by 1.8 million tonne to reach the rated capacity of 6.8 million tonne in fiscal 2007-08 and thereafter to 10 million tonne by fiscal 2010. Tata Iron s greenfield projects in Orissa and Chhattisgarh are progressing on schedule with placement of equipment order for Kalinganagar project in Orissa and commencement of the land acquisition process. Jharkhand project is waiting announcement of R & R policy of the state Government. The construction work of ferrochrome project in South Africa is in full swing. Acquisition of Corus: Recently Tata Iron acquired the Anglo-Dutch Iron maker Corus, thus emerging as the fifth largest Iron producer in the world.

The Iron major has won the Prime Minister's Trophy four times. This award is instituted by the Indian ministry of Iron and awarded to the country's best integrated Iron plant. In 2000, it became the first Tata company to win the JRD Tata QV award, given to the company with 'world class' operations under the Group's Tata Business Excellence Model Areas of business Apart from the main Iron division, Tata Iron 's operations are grouped under strategic profit centres like tubes, growth shop (for its Iron plant and material handling equipment), bearings, ferro alloys and minerals, rings, agrico and wires. Tata Iron 's products include hot and cold rolled coils and sheets, tubes, wire rods, construction bars, structurals, forging quality Iron , rings and bearings. In an attempt to 'decommoditise' Iron , the company has recently introduced brands like Tata Iron ium (India's first branded cold rolled Iron ), Tata Shaktee (galvanised corrugated sheets), Tata Tiscon (re-rolled bars), Tata pipes, Tata bearings, Tata Wiron (galvanised wire products) and Tata Agrico (hand tools and implements). Tata Iron businesses. is also exploring opportunities in the ferro-chrome and titanium

Iron & Steel plants and related companies

Bharat Refractories Limited (BRL) Hindustan Iron Works Construction Limited (HSCL) Jindal Iron & Power Ltd. Kudremukh Iron Ore Company Limited (KIOCL) Manganese Ore (India) Limited (MOIL) Metal Scrap Trade Corporation Limited (MSTC) Metallurgical & Engineering Consultants(India) Limited (MECON) National Mineral Development Corporation Limited (NMDC) Rashtriya Ispat Nigam Limited (RINL) Sponge Iron India Limited (SIIL) Iron Authority of India Limited (SAIL) Tata Iron & Iron Company (TISCO)

Role of Iron and Steel Industry in India GDP

The role of Iron and Iron Industry in Indias GDP is very important for the are the vital components required for the

development of the country. Iron and Iron infrastructure development in the country.

From the trifle one million tonne capacity status at the time of independence, India has now achieved the 5th largest crude Iron producer in the world and the largest producer of this segment is made up of the mini mills sponge iron. According to the official estimates, the Iron and Iron Industry contributes around 2 per cent of the Gross Domestic Product (GDP) and its weight in the Index of Industrial Production (IIP) is 6.2 per cent. In contrast to a negligible global presence, the Indian Iron industry, presently, is globally acknowledged for its product quality. The National Iron Policy of 2005 had anticipated consumption to grow at 7% based on a GDP growth rate of 7-7.5% and production of 110 million tonne by 2019-20. These estimates will be, by and large, exceeded and it has been gauged that, on a 'most likely scenario' basis, the crude Iron production capacity in the country by the year 2011-12 will be nearly 124 million tonne. For the 11th Five Year Plan (2007-12), the Planning Commission has granted a total outlay of Rs. 45607.08 crore (i.e. Internal and Extra Budgetary Resources [I&EBR] of Rs. 45390.08 crore and Gross Budgetary Support [GBS] of Rs. 217 crore).

Indian Iron industry has recently recovered out of the slowdown that affected its performance during 2008-09. On the domestic front, 2009 ended on a relatively better and encouraging note, with the CSO reporting an overall improvement of economic situation through its GDP data, which showed a robust 7.9 per cent growth during July-September 2009-10. IIP too had registered a strong 7.6 per cent growth during April-November 200910, further augmenting the idea that the demand side is back on stable footing. For Iron , this is of paramount importance and the growth rates registered for leading end-use segments like manufacturing, consumer durables, construction, the stable growth of the service sector and agriculture sector spell good news. April-December 2009 provisional data released by JPC indicates a 7.8 per cent rise in consumption of total finished Iron . Globally also there are indicators of improvement in economic conditions and firming up of demand and prices.

OBJECTIVE OF THE STUDY

To compare Private and Public Iron sector with refrence to TATA Iron and Iron Authority Of India.

To analyse potential of the companies To analyse measures taken by Indian government to improve the industry and study the National Iron & Iron Policy 2005

To analyse the future of Indian Iron industry.

RESEARCH METHODOLOGY

According to Green and Tall A research design is the specification of the methods and procedures for acquiring the information needed. It is the overall operational pattern or framework of the project that stipulates which information is to be collected, from where it is to be collected and by what procedures This research process based on primary data analysis and secondary data analysis will be clearly defined to meet the objectives of the study.

I chose the primary sources to get the data. A questionnaire was designed in accordance with our mentor in Ketchup. I chose a sample of about 30 corporate customers

I collected some data from the secondary sources like published Company documents, internet etc. Research Design A research design is the arrangement of conditions for collections and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedures. It is a descriptive cross sectional design .It is the conceptual structure with in which research is conducted; it constitutes the blueprint for the collection, measurement and analysis of data. It is needed because it facilitates the smooth sailing of the various research operations, thereby making research as efficient as possible yielding maximal information with minimal expenditure of effort, time and money. In the preliminary stage, my research stage constituted of exploratory study by which it is clear that the existence of the problem is obvious .So, I can directly head for the conclusive research. Sampling Plan Sampling plan is a distinct phase of research process. In this stage I have to determine who is to be sampled, how large should be the needed sample and how sampling unit is to be selected.

Population In my research, I have defined my population as a complete set of customers of Sagar City. Sample Survey As compared to census study, a sample study has been conducted by us because of: Wide range of population, it was impossible to cover the whole population Time and money constraints. Sample Unit In this survey I took the list of customers from the dealers of Ketchup Sampling Technique Sampling technique implies the method of choosing the sample items, the two methods of selecting sample are: Probability method. Non-probability method. Probability method is those in which every item of the universe has an equal chance of the inclusion in the sample. Non-probability methods are those that do not provide every item in the universe with known cause of being included in the sample. The selection process is partially subjective. For my study, I employed the Non-probability sampling technique, in which I got the data of the customers from the dealer of Ketchup. Instrument of collection of data I have used one set of questionnaire to collect data from the customers. This questionnaire is structured and highly ordered. This includes both close ended and open ended questions. The close ended questions included both dichotomous and multiple choice questions.

MARKET ANALYSIS
3.1: Market Overview

The Iron market mainly consists of the crude Iron production in the stated country or region. Crude Iron Production is the production of solid Iron product, after the solidification of liquid Iron . It includes Ingots (from conventional mills) and Semis (from modern mills with continuous casting facility). Crude Iron also consists of liquid Iron which goes into production of Iron castings. Market share represent volumes of Iron produced by a company in respective market. In this report, both Global and Asia-Pacific Iron market is considered, in which Asia-Pacific comprises Australia, China, India, Japan, Singapore, South Korea, and Taiwan. The Indian Iron market had total revenue of $32.9 billion in 2009, which represented a compound annual growth rate of 12.8% for the period spanning 2005-2009.Iron production volumes in the market increased with a CAGR of 5.5% between 2005 and 2009, to reach a total of56,608 thousand metric tons in 2009. The performance of the market is forecasted to accelerate, with an anticipated compound annual growth rate (CAGR) of 20.3% for the five-year period from 2009-2014, which is expected to propel the market to a value of $82.8 billion by the end of 2014.

Market Exploration
The Indian Iron market experienced strong growth until 2009, after which it fell into a steep decline. Recovery to double-digit growth is expected in 2010, followed by deceleration during the forecast period, although the market will maintain strong growth levels throughout this time. The Indian Iron market had total revenue of $32.9 billion in 2009, which represented a compound annual growth rate (CAGR) of 12.8% for the period spanning 2005-2009. In comparison, the Chinese market increased with a CAGR of 12%, and the Japanese market declined with a compound annual rate of change (CARC) of -6%, over the same period, to reach respective values of $329.8 billion and $50.8billion in 2009. Market production between 2005 and 2009 volumes increased with a CAGR of 5.5%, to reach a total of56,608 thousand metric tons in 2009.By the end of 2014,the market's volume is expected to rise to 86,632.5 thousand metric tons, representing a CAGR of 8.9% for the 2009-2014 period.

The performance of the market is forecasted to accelerate, with an anticipated CAGR of 20.3% for the five year period 2009-2014, which is expected to drive the market to a value of $82.8 billion by the end of2014. Comparatively, the Chinese and Japanese markets will grow with CAGRs of 11.9% and 13.6%respectively, over the same period, to reach respective values of $579 billion and $96.2 billion in 2014.

Market Value and Volume

The Indian Iron market has amplified in terms of its market value from 2005 to 2009. The industry boosted by about 51.4% in 2008 indicating to the fact that India was growing as one of the top 5 Iron manufacturers in the world. However, in the consequent year, the industry saw a plunge in the growth rate by about 14.8%. A probable reason for this decline may be the financial meltdown that the globe witnessed. Falling prices in the backdrop of economic slowdown have spelt turmoil in the industry the world over. The compound annual growth rate of the market was 12.8% during the period 200509 and this sends out a positive signal regarding the industry.

The Indian Iron market shrank by 2% in 2009 to reach a volume of 56.6 million metric tons. The compound annual growth rate of the market in the period 200509 was 5.5%.

Global ranking of Indian Iron

Global production of crude Iron is 1220 million tonne in 2009, but as compared to 2008, production of crude Iron has decline by 8%. China is the largest crude Iron producer in the world. It has achieved a production level of 567.8 million tonne in 2009, but in comparison with the last year China reported a significant growth of 13.5% in crude Iron production. India once again evolved as the fifth largest producer in 2009 and recorded a growth of 2.7 per cent as compared to previous year, 2008, the only other country in the top 10 bracket to register a positive growth during 2009. India also evolved as the largest sponge iron producing country in the world in 2009, a rank it has achieved since 2002. If as per schedule proposed expansions plans are implemented, India may become the second largest crude Iron by2015-16. producer in the world

Table 3.3 : Rank 1 2 3 4 5 6 7 8 9 10

World Crude Iron Production 2009 Country China Russia Japan US India South Korea Germany Ukraine Brazil Turkey Production(million tonne) 567.8 87.5 59.9 58.1 56.6 48.6 32.7 29.8 26.5 25.3

Source : World Iron Association

CONSUMER BEHAVIOUR
Economical Factors: The Ministry of Steel is expected to play a crucial role in ensuring harmonious andintegrated growth of the Steel Sector in India. Being a core sector, steel sectors sustainedgrowth is a prerequisite for attaining the level of GDP growth envisaged in the 11th FiveYear Plan.Escalating raw materials and energy costs are adversely affecting the balance sheets of manycompanies in the steel sector. There is also a need for a sustained level of private investmentin the sector.The Indian steel sector was the first core sector to be completely freed from the licensingregime and pricing and distribution controls. This was done primarily because of theinherent strengths and capabilities demonstrated by the Indian iron and steel industry. Theeconomic reforms and the consequent liberalization of the iron and steel sector which startedin the early 1990s resulted in substantial growth in the steel industry and green field steel plants were set up in the private sector. This sector represents over Rs.90,000 crore of capitaland directly provides employment to over 5 lakh people. The production of finished steelduring the year 2006-07 was 50.20 million tones with annual growth rate of 12.87% over the previous year. The production of finished carbon steel during the current year 2007-08(April-December) at 38.09 million tones (Prov.) was up by 5.6% over the corresponding period of previous year. Current GDP per capita is USD 2500.The annual growth rate of finished steel production in India during 2002-2003 was 9.9%.The production of finished steel during 2003-2004 was 36.957 million tones. The annualgrowth rate of finished steel production in India during 2003-2004 was 9.7%. The Finished(Carbon) Steel production during the current year (April-October 2004) at 21.681 MT (Prov)was up by 3.5% over the corresponding period of the pervious year. (10) Duties on raw materials for steel production were reduced. These measures reduced thecapital costs and production costs of steel plants.TIMS14 Tata Iron & Steel CompanyFreight equalization Scheme was withdrawn in January, 1992. However, with the coming upof new steel plants in different parts of the country, iron and steel products are freelyavailable in the domestic market.Recent years have witnessed unprecedented turmoil in the global steel market. The crisis inthe international steel market might be attributed to the misbalance between capacity, demand and production and consequent drop in prices. Throughout the world there is anapparent over capacity (estimated to be between 100 Mt-150 Mt) in the steel sector. According to the IISI, the companies have been selling their products below costs to survivein global competition.Since 2001, while growth has been negative in most mature markets, Asia has maintained asteady growth rate. The Asian production growth has mainly been driven by the surge insteel demand and production in China. The huge Chinese appetite for steel has led the 10.2%surge in output. The growth in Chinese steel demand, generated mainly by demand frominfrastructure sector is a beacon for Indian steel since both the nations are comparable onmany counts. The Indian steel manufacturers are faced with some major problems and concerns, whichwork as inhibiting factors to their effort towards gaining the competitive edge. A few of these are: Unremunerative Prices: Stagnating demand, domestic oversupply and falling prices in thelast few years have hit Indian steel makers. Barring the sporadic rise in demand in the recentmonths, it has suffered from unremunerative prices to the extent that companies have beenfinding it difficult to maintain capital costs. Stagnating Demand for Steel:

According to Mc-Kinsey and Co the domestic steel industryis set to witness a 33% over capacity in the hot rolled coil sector by the year 2003 when thedomestic capacity currently at 45%, in long products and semis is expected to drop at 22% by that year. The non-flat products are also likely to face an over capacity of over 21.4%. Lower Consumption: Steel consumption in India over a period of time has exhibited astrategy correlation to GDP growth (correlation coefficient of 0.9855 between 1960-1961and 1996-1997) and gross domestic capital formation (0.981).The correlation with GDCF has been 1.0 for the period FY 1994 to 1999. As investmentsdeclined from 1996-1997 onwards, steel consumption also decreased. Failure to DevelopTrade Especially International Trade . The countries which have achieved major growthincluding growth in steel industry, like Japan, China and South Korea have largely used their trading houses to develop their markets abroad. In India, they have singularly failed to do so.As a result, Indian steel industry does not have a major presence even in the neighboringcountries.The reasons for the same include lack of profit motive, wrong scale of assets, little or no co-ordination between plants and markets, inappropriate logistics/locations, over-manning, poor investment decisions, lack of innovation and inadequate investment in requisite areas. Slow Industry Growth: The linkage between the economic growth of a country and thegrowth of its steel industry is strong. The Indian steel industry is no exception. The growthof the domestic steel industry between 1970 and 1990 was similar to the growth of theeconomy, which as a whole was sluggish. This sluggish growth in the steel industry hasresulted in enhanced rivalry among existing firms. As the industry is not growing the onlyother way to grow is by increasing one.s market share. Consequently, the Indian steelindustry has witnessed spurts of price wars and heavy trade discounts, which has doneIndian steel industry no good as a whole

PRODUCT PROFILE
TATA Steel:
Tata Steel is India's largest integrated private sector steel company. Established in 1907, The Company is backward integrated with owned iron ore mines and collieries. Tata Steel has an integrated steel plant, with an annual crude steel making capacity of 5 million tonne, located at Jamshedpur, Jharkhand. The steel works is situated at Jamshedpur in the state of Jharkhand, India. The factory covers 800 hectares of land . West Bokaro sub division in Hazaribagh district overs 2000 hectares of land in which mining and coal beneficiation activities are performed. Jharia Division occupies 2500 hectares of land for its industrial, mining and domestic activities in the district of Dhanbad both in the state of Jharkhand. The iron ore and dolomite mines are located at Noamundi in the state of Jharkhand and at Joda, Kalamati, Khondbond and Gomardih in the state of Orissa. Over the years, Tata Steel has emerged as a thriving, nimble steel enterprise due to its ability to transform itself rapidly to meet the challenges of a highly competitive global economy and commitment to become a supplier of choice. Constant modernization and introduction of state-of-the-art technology at Tata Steel has enabled it to stay ahead in the industry. Tata Steel has completed the first nine months of fiscal 2006-07 with impressive increase in its production and sales volumes. The hot metal production at 4.1 million tonne is 8.2% more compared to the last year in the corresponding period and crude steel production at 3.7 million tonne is higher by 7.9% compared to the last year in first three quarters.

The saleable steel production at 3.7 million tonne registered a significant increase of 11%. The total sales of 3.53 million tonne has grown by 11.7% over last financial year in the corresponding period. The domestic sale of long products has increased by 30%. Tata Steel is continuing with its programme of expansion of steel making capacity by 1.8 million tonne to reach the rated capacity of 6.8 million tonne in fiscal 2007-08 and thereafter to 10 million tonne by fiscal 2010. Tata Steels greenfield projects in Orissa and Chhattisgarh are progressing on schedule with placement of equipment order for Kalinganagar project in Orissa and commencement of the land acquisition process. Jharkhand project is waiting announcement of R & R policy of the state Government. The construction work of ferrochrome project in South Africa is in full swing. Acquisition of Corus: Recently Tata Steel acquired the Anglo-Dutch steel maker Corus, thus emerging as the fifth largest steel producer in the world. The steel major has won the Prime Minister's Trophy four times. This award is instituted by the Indian ministry of steel and awarded to the country's best integrated steel plant. In 2000, it became the first Tata company to win the JRD Tata QV award, given to the company with 'world class' operations under the Group's Tata Business Excellence Model Areas of business Apart from the main steel division, Tata Steel's operations are grouped under strategic profit centres like tubes, growth shop (for its steel plant and material handling equipment), bearings, ferro alloys and minerals, rings, agrico and wires. Tata Steel's products include hot and cold rolled coils and sheets, tubes, wire rods, construction bars, structurals, forging quality steel, rings and bearings. In an attempt to 'decommoditise' steel, the company has recently introduced brands like Tata Steelium (India's first branded cold rolled steel), Tata Shaktee (galvanised corrugated sheets), Tata Tiscon (re-rolled bars), Tata pipes, Tata bearings, Tata Wiron (galvanised wire products) and Tata Agrico (hand tools and implements).

Tata Steel is also exploring opportunities in the ferro-chrome and titanium businesses. Joint ventures, associates and subsidiaries Tata Steel has numerous joint ventures and subsidiaries. Among them are:

Tinplate Company of India Tayo Rolls Tata Ryerson Tata Refactories Tata Sponge Iron Tata Metaliks Tata Pigments Jamshedpur Injection Powder (Jamipol) TM International Logistics mjunction services TRF Jamshedpur Utility and Service Company (JUSCO) The Indian Steel and Wire Products(ISWP) Lanka Special Steel Sila Eastern Company

ESSAR STEEL LTD.

Essar Steel is an int egrated steel producer, with operations all along the value chain. Essar Steel produces some of the worlds best steel at its state-of-the-art steel complex at Hazira, Gujarat. It is also Indias largest exporter of flat products, sending half of its production abroad, mainly to the highly demanding markets of the west, and the growth markets of South East Asia and Middle East. Essar ensures excellent customer services through a modern distribution network. Essar Steels core manufacturing facilities are located at its steel complex in Hazira, Gujarat. The Hazira complex includes a 5.5 million tonne per annum Hot Briquetted Iron (HBI) plant, a 4.6 mtpa continuous caster slab facility, a 3.6 million tonne per annum Hot Rolled Coils (HRC) and a 1.2 mtpa cold roll mill complex with all down stream facilities. The facilities are complemented by its own 8.0 mtpa pellet plant at Vishakapatnam and 0.4 million tonne per annum cold rolled coil plant at Indonesia. Expansion Presently Essar Steel has embarked upon a capacity expansion for enhancement of its production capacity from 4.6 million tonne per annum to 7.6 million tonne per annum. The capacity expansion programme will consist of 2 units of Corex units of 1.5 million tonne per annum each. Further value addition will be carried out by Continuous Strip Caster Mill, conventional Slab Caster Mill and a 5.2 meter Wide Plate Mill. Products All Essar Steels products are world class, meeting the highest international standards, supported by excellent marketing and service.

JSW STEEL LTD.

JSW Steel Ltd. is a 3.8 million tonne per annum integrated having ore a steel process plant, route

consisting broadly of iron beneficiation pelletisation sintering coke making iron making through blast furnace as well as Corex process steel making through BOFcontinuous casting of slabs hot strip rolling. The production facilities include 3.0 million tonne per annum iron ore beneficiation unit, 5.0 million tonne per annum pellet plant, 3.2 million ton ne per annum sinter plant, 1.2 million tonne per annum coke ovens, 0.9 + 1.3 million tonne per annum blast furnaces, two Corex units of 0.8 million tonne per annum each, 3 X 130 t converters, three slab casters, and a 2.5 million tonne per annum hot strip mill with state-of-the-art coil box technology. JSW Steel has a distinction of being certified to ISO-9001:2000 Quality management system, ISO-14001:1996 environment management system and OHSAS 18001:1999 occupational health and safety management system. During this year, JSW Steel has also been conferred with a number of awards. Production Performance
(in million tonne) Items Pellets Hot Metal Slabs Hot Rolled Coils 2003-04 3.25 1.63 1.61 1.54 2004-05 3.61 1.96 1.87 1.78 2005-06 3.80 2.40 2.25 2.10 April-Dec.06 2.93 2.19 1.95 1.48

JINDAL STEEL AND POWER LTD. (JSPL)

Jindal Steel and Power Ltd. (JSPL), part of the $4 billion Jindal Organisation, has business interests in steel, power generation, mining iron ore, coal and diamond exploration/mining. The current tur nover of the company is over Rs. 3,000 crore. JSPL is the worlds largest producer of coal based sponge iron. The product range encompasses 27 steel slabs, rounds, blooms and beam blanks. JSPL is producing rails and H beams and columns in technical collaboration with JFE Corporation, Japan. These H-beams are the most desired option of structural engineers worldwide. JSPL is the largest private sector investor in the state of Chhattisgarh with a total investment commitment of more than Rs. 10,000 crore. The company is also setting up a 6 million tonne steel plant in Orissa with an investment of Rs. 13,500 crore and a 5 million tonne steel plant in Jharkhand with an investment of Rs 11,500 crore. Jindal Power Ltd., wholly-owned subsidiary of JSPL, is setting up a 1000 mega watt O.P. Jindal super thermal power plant at Raigarh, with an investment of over Rs. 4,500 crore. JSPL has been rated as one of the best environmentally managed companies in India and committed to environment protection as an integral part of their business activities.

ISPAT INDUSTRIES LTD. (IIL)

Ispat Industries Ltd. (IIL) has set up integrated steel plants at Dolvi (district Raigad), a backward region of Maharashtra, with a capacity of 3 million tonne of hot rolled coils per annum. The plant has got a 2.24 million tonne per annum sintering plant, 2 million tonne per annum blast furnace and 1.6 million tonne per annum gas based sponge iron plant. IIL have uniquely combined the usage of hot metal and sponge iron in the electric arc furnace for production of liquid steel for the first time in India. IIL have also adopted the state-of-art technology called Compact Strip Production (CSP) process, which has been installed for the first time in India and produces high quality and very thin gauges of Hot Rolled Coils (HRC). The IILs products are accepted in the domestic and international market. The production performance of IIL during last three years has been as follows:
(in million tonne) Items Hot Metal Sponge Iron Hot Rolled Coils 2003-04 1.29 1.06 1.62 2004-05 1.40 1.05 1.97 2005-06 1.42 0.89 2.15 2006-07 (Up to Dec06) 1.14 0.85 1.97

The two thin slab casters each with designed capacity to cast 55 and 60 mm slabs with Iiquid Core Reduction (LCR) features available. Ispats casters have achieved global benchmark in annual production, as confirmed by Steel Melting Shop (SMS) Demag, the technology supplier.

MARKETING STRATEGIES
1. PRODUCT:
The Companys products consist of TSL products, produced by the Companys Indian operations and its NatSteel and Tata Steel Thailand operations, and Corus products, and produced in the United Kingdom and The Netherlands. TSLs products can be divided into three main categories: 1. Finished and semi-finished steel products; 2. Ferro alloys products; and 3. Other products and services, including tube products, bearing products, refractory products, pigments, municipal services and investment activities. Corus has four main product segments: (1) strip products; (2) long products; (3) distribution and building systems; and (4) aluminum. PRICE: Pricing is one of the most crucial elements behind a successful product. It is more pragmatic and fact oriented in industrial marketing as compared to pricing for consumer products. Pricing in industrial marketing is closely related to the firms product, distribution and communication strategies.

Factors Influencing Pricing Strategy in Steel Industry

The most important factors which affect pricing strategies in steel industry are: 1. Production Costs 2. Market demand (derived in nature) 3. Competition 4. Government regulations

Production Costs
Tata Steel is the lowest cost manufacturer of steel and keeping production costs low have played a major role in achieving that. The following measures have helped Tata Steel in maintaining cost leadership: 1. Acquiring sources of raw materials in India and globally: Tata Steel has captive coal mines in West Bokaro and Jharia. The mines in Bokaro have reserves of over 196 million tones and the coke mine in Jharia can produce 1.9 million tones of raw coal annually. Its iron ore mines are located in Noamundi and Joda and chromite mines at Sukinda contribute to raw materials for Tata Steel.

Internationally, Tata Steel has 5% interest in the Carborough Downs Coal Project located in Queensland Australia for low ash coal. The Sila Eastern Company has been established to develop limestone mines in Thailand mainly for the captive use of Tata Steel.

2. Capacity expansion: With the expansion of its Jamshedpur plant by 2012 and

Greenfield units in Orissa and Chhattisgarh becoming operational in 3-4 years, its manufacturing capacity will jump to 21 mtpa. Acquisition of Corus has made Tata Steel one of the largest manufacturers of steel.

3. Technology: Tata Steel has developed several technologies that help in keeping

production costs low. Some of them are:

-

Process innovation and use of blue dust in sinter plants increased productivity by 60%. Stamp charging technology was indigenously developed to convert low quality coal to high quality coking coal. This reduced the import of coking coal.

Market Demand:
Demand for steel is derived in nature since it is majorly used as an input. The following facts and figures suggest that there exist healthy demand in market for Tata Steel to serve. - World consumption of steel is expected to be 1.23 billion tonnes in 2010 registering a growth of 10% over 2009. The exports during 2010 are expected to be higher by around 4% as compared to 2009. In India, apparent consumption is expected to increase by more than 10% in FY 11 buoyed by expected strong performances from consuming segments like automotive, construction, infrastructure and capital goods.

Distribution
JSW Steel has launched JSW Shoppe to markets its steel products as compared to Mjunction launched by TATA Steel. The exclusive JSW showrooms retail all types of JSW steel, ranging from HR coil to colour-coated steel. "JSW is looking at opening 600 retail outlets in the next two years time to market steel in the country. The reason for such openings is to keep a check on the variation in steel prices from company to company," JSW Vice Chairman and Managing Director Sajjan Jindal told in a press interview. JSW aims to provide a unique experience of buying steel products through branded distribution channels. It started off with an idea to give a different feel and ambience to steel retail. JSW Steel wanted to give a feel of a mini-departmental store or a mall, which would have the same format, same look and feel wherever the buyer goes in the country. So, it will give a branding to the distribution channel. It will also display all the products in one place so that the customer gets a touch and feel of what the steel looks like. The smaller towns will be focus areas. The bigger towns and metros will also have shops, but their focus is on tier 2

and 3 cities. If this takes off properly, they propose to target 600 Shoppes in 2012. This will enable them to sell 600,000 tonnes a month, which comes to 7.2 million tonne a year (when the company opens 600 stores by 2012). By 2012, they are targeting at least 50% of sales through the Shoppes.

Comparison of distribution Channels of TATA Steel Vs JSW Steel

As compared to TATA Steel,JSW Steel does not sell its products online.It is here that TATA Steel has a competitive advantage.According to reports TATA Steel sell over 50% of its products through Mjunction.The revenues through Mjunction has crossed 450 crores(INR) in the year 2009-10.As a result it serves as a huge platform for TATA Steel to sell its products without incurring distribution costs.Its margins has therefore shown an upward trend in the past six years. JSW Shoppe,the retail outlet opened by JSW Steel has started its operations in 2007 and yet to penetrate the market whereas Steel Junction,the retail outlet of TATA Steel has already opened its outlets in many places including semi-urban and rural areas.

PROMOTION:
In B2B marketing advertising, promotions and publicity plays an important role in the communication strategies. Hence, to contribute to the overall effectiveness of the promotional strategies utmost care must be taken by the companies. B2B promotion is used to create awareness of the company, to increase the sales of the product and to increase the overall effectiveness of the selling efforts. The promotional programme begins with carefully developed advertising objectives that must be formulated from corporate and marketing objectives in such a manner as to set the direction for creating, co-coordinating, and evaluating entire promotional programme.

ABOUT COMPETITORS
Competition in Indian Steel & Iron Industry
The Indian steel industry mainly consists of the producers of finished steel, semifinished steel, stainless steel and pig iron. Indian steel industry, having contribution from both public sector and private sector companies, is one of the fastest growing markets for steel and is also increasingly looking towards exports, thus driving the growth of the industry. The nature of competition in the steel market is far more complex especially when examined for each product separately. Due to the specific characteristics of the steel products and the consumer profile, competition for each gets confined only to smaller number of players. Flat Products: Flat products are rolled mostly from semi-finished forms called slabs. There are two streams of flat products which are either produced from a plate mill (Plates) or a hot strip mill (HR coils). In 2007-08, the five major companies, SAIL, Tata Steel, Essar, Ispat and JSW together had a share of about 92.4 per cent in total production in the country. While with the entry of few more companies in the narrow segment of the market, the competition seems to be increasing, but no such changes have been visible in the wider segment. The wider HR coils dynamics have also changed alarmingly as all the erstwhile merchant producers of HR coils have added downstream cold rolling capacities. This has, in fact, substantially reduced the merchant HR coils supplying the local market. Since, there are no formal controls or regulations on steel prices; they are to be driven by the market. However, there seems to be market imperfections and which may give rise to possible cartelisation and which in turn has provided the producers of HR Coils greater degree of market power vis--vis the buyers. Other steel products: Other steel products such as bars and rods, structurals, plates, CR coils and sheets, GP/GC sheets etc. have not caught much attention of the public from the competition perspectives.. In 2007-08, SAIL accounted for about 93 per cent of the total plates production, which dipped to 88 per cent the next year. Others were small players and were not competing with SAIL on size and grades. SAIL continued with its monopoly position till it met with some competition from plates produced from hot strip mills and expanded capacity from others. Market Sharing and Collusion

The very fact that the Indian steel industry, even in the bad times, was out of the consolidation process, always lends support to the hypothesis that the industry instead had chosen to collude rather than consolidate through mergers and acquisitions. However, the major steel producers have substantial pricing power in the market and that they can be expected to act in phase with substantial net impact on the market to move the trends in the desired direction. In fact, although the government action is appeared to correct market imperfection, it has at the same time given rise to competition issues in the market. For example, the governments action to restrict prices, through the low cost producers, while at the same time not taking similar action for reduction of prices of sponge iron and steel scrap, has put the small and medium size induction furnace based steel production at jeopardy as they find their output prices not increasing in proportion to their costs.

The other major Private steel companies are

JISCO. Saw Pipes. Uttam Steels Ltd. Mukand Ltd. Mahindra Ugine Steel Company Ltd. Usha Ispat Ltd. Kalyani Steel Ltd Electro Steel Castings Ltd. Sesa Goa Ltd. NMDC. Lloyds SteeI Industries Ltd.

DATA ANALYSIS AND INTRERPRETATION

The government plans to raise infrastructure spending from the current 5% of the GDP to 10% by 2017. Given Indias double-digit energy deficit, one third of the allocated amount or infrastructure spending is directed towards power sector. The Indian power sector may expect orders for over 100 giga watts, worth Rs 1.1 lakh crore over the next 2-3 years. Besides power plant construction, steel will also be extensively used in making pipelines and power equipment. For the roads and bridges sector, the 11th five year plan envisages a total investment of approximately Rs 1.6 lakh crore. Construction of new ports, new terminals in existing ports, expanding the railway network and building new roads, especially ones involving bridges, will be the key drivers of steel demand. A scheme for promotion of research and development in iron and steel sector in the 11th five year plan has been approved with a stipulated spending of Rs 118 crore.

Finance minister Pranab Mukherjee provided Rs 1,73,552 core -- constituting over 46% of the total planned allocation -- for infrastructure development in Budget 2010. The steel ministry has stated that, going by MoUs signed by private producers with various state governments over the past few years, Indias capacity could potentially go up to

293 million tonnes by 2020. However, the National Steel Policy 2005 seems to be a bit more realistic with steel production target of only 110 million tonnes by 2019-20. Currently, import duty on steel items is 5%. There is none on raw materials such as scrap or coking coal. But, to protect long-term interests of domestic industry, the government recently hiked export duty on iron ore fines to 15%. Of the total outlay of around Rs 17,200 crore in Budget 2010 for the ministry of steel, Rs 12,254 crore(around 70%) has been provided for the Steel Authority of India (SAIL). SAIL, which at 13mtpa production capacity is the biggest domestic steel player, is all set for major expansion and technology upgrades to make it more efficient and world class.

The Indian steel industry has many growth drivers such as easy availability of raw material and workforce. The growth of the construction industry, which is growing at a rate of around 8-9% is one of the major consumers of steel in the country. The eleventh five year plan (2007-2012) by the Indian government, has allocated investment of USD$ 490 billion for the core infrastructure sector, comprising power, roads, railways, ports, airports, which are some of the major consumers of steel. The expansions in the Indian automotive industry and the oil and gas sector.

India is largely sufficient in raw materials for Iron and Steel Industry. 25 billion tonnes of iron ore reserves - the fifth largest reserve base in the world. 253 billion tonnes, (96 billion tonnes proven reserves) Coal- 4th largest proven coal reserves in the world India also has worlds 2nd largest Mn reserves (240 million tonnes), 3rd largest Cr reserves (57 million tonnes) and 4th largest bauxite reserves (2.4 billion tonnes).

3.11.2 : Factors Holding Back The Indian Steel Industry The growth of the Indian steel industry and its share of global crude steel production could be even higher if they were not being held back by major deficiencies in fundamental areas. Investment in infrastructure is rising appreciably but remains well below the target levels set by the government due to financing problems. Energy supply: Power shortages hamper production at many locations. Since 2001 the Indian government has been endeavouring to ensure that power is available nationwide by 2012. The deficiencies have prompted many firms with heavier energy demands to opt for producing electricity with their own industrial generators. India will rely squarely on nuclear energy for its future power generation requirements. In September 2005 the 15th and largest nuclear reactor to date went on-line. The nuclear share of the energy mix is likely to rise to roughly 25% by 2050. Overall, India is likely to be the worlds fourth largest energy consumer by 2012 after the US, China and Japan. Problems procuring raw material inputs and raising costs: Since domestic raw material sources are insufficient to supply the Indian steel industry, a considerable amount of raw materials has to be imported. For example, iron ore deposits are finite and there are problems in mining sufficient amounts of it. Indias hard coal deposits are of low quality. For this reason hard coal imports have increased in the last five years by a total of 40% to nearly 30 million tons. Almost half of this is coking coal (the remainder is power station coal). India is the worlds sixth biggest coal importer. Rising raw material prices had become a concern for steelmakers worldwide, including in India. Spot prices of iron ore and coking coal had risen by almost 60-70% from the 2009 levels. Indias largest iron ore producer, National Mineral Development Corp (NMDC), has already announced a provisional hike of 34-56% in base prices in April 2010. While for iron ore fines, the hike is 34% to Rs 2,600 a tonne, for calibrated lump ore it is 46% to Rs 3,800. In March 2010, coking coal prices were hiked by almost 55% to $220/tonne for all long-term contracts. This will increase the cost pressure on companies. The recent demand softening and easing of steel prices have put pressure on raw material prices as well. Spot prices of iron ore fines have dropped about $60 a tonne and that of coking coal by $20 a tonne. Ore prices are currently hovering at $120 a tonne and coking coal at $200 a tonne. The recent plunge in iron ore prices has been mainly driven by recent expectations of production cut in China as per the Steel Business Briefing survey.

Inefficient transport system: In India, insufficient freight capacity and a transport infrastructure that has long been inadequate are becoming increasingly serious impediments to economic development. Although the country has one of the worlds biggest transport networks the rail network is twice as extensive as Chinas its poor quality hinders the efficient supply of goods. The story is roughly the same for port facilities and airports. In the coming years a total of USD 150 bn is to be invested in transport infrastructure, which offers huge potential for the steel industry. In the medium to long term this capital expenditure will lay the foundations for seamless freight transport. Financing Capacity Expansion: Steel is a capital intensive industry with high fixed cost. To reach the projected CAGR of 7.3%, projects of around 60mtpa will be needed to be commissioned in the next 3-4 years. Such large projects will need an investment of Rs 2.5 lakh crore. Profitability of domestic producers weakened in the second half of FY09. It has picked up in the last 3-4 quarters. Still, internal accruals of manufacturers would be low compared to the estimates at the time of announcement of projects. With a steep hike in raw materials, profit margins will also be under severe pressure. So, dependence on external sources to finance the capital expenditure be larger. Although the Indian equity market has recovered in recent times, its ability to fund such large projects remains uncertain given the scale of government borrowing scheduled for 2010-11. Bank financing, however, remains a possibility since the Indian banking system still has some liquidity buffer at present. There could be uncertainty over the lenders willingness to finance such large-scale projects in the event of steel prices falling again in future. The capital structure of the steel makers can deteriorate due to lower internal accruals and heavy capital expenditure. In the post-de-regulation period, the role of the Ministry of Steel has primarily been that of a facilitator for the Indian steel industry, being responsible for the planning and development of the iron and steel industry, development of essential inputs such as iron ore, limestone, dolomite, manganese ore, chromites, ferro alloys, sponge iron, and other related functions. In its present day role, the Ministry of Steel is extending all possible support for the development of the Iron and Steel Industry in the country, in matters like: Facilitating expedited growth of steel capacity investments through active coordination and formulation of right policy directives. An Inter-Ministerial Group

(IMG) is functioning in the Ministry of Steel, under the Chairmanship of Secretary (Steel) to monitor and coordinate major steel investments in the country. Providing linkage for raw materials, rail movement clearance etc. for new plants and expansion of existing ones. Facilitating movement of raw materials other than coal through finalisation of wagon requirements and ensuring an un-interrupted supply of raw materials to the producers. Regular interactions with entrepreneurs proposing to set up new ventures, to review the progress of implementation and assess problems faced. Identification of infrastructural and related facilities required by the steel industry, and coordination of infrastructure requirement of steel sector with the concern Ministries/Department. Promoting, developing and propagating the proper and effective use of steel and increasing the intensity of steel usage, particularly in the construction sector in rural and semi urban areas, through "Institute for Steel Development and Growth (INSDAG)" in Kolkata. Encouraging research and development activities in the steel sector. An Empowered Committee under the Chairmanship of Secretary (Steel) provides overall direction to research efforts on iron and steel in the country and approves specific research projects placed before it for funding, fully or partially, from the Steel Development Fund. Efforts are being made to further augment R&D activities in the country with Government budgetary support during the 11th plan period. While exports of finished steel were sustained at a level of 4-5 million tonne per annum during the 10th Plan, imports sharply increased from about 1.75 million tonne in 2003-04 to 5.21 million tonne in April-December 2009 (provisional data), not because of fall in competitiveness but to fill up supply-demand gap in the domestic market. Once these challenges are met and with proper support from the government to minimize the current issues, the Indian steel production can race ahead and produce more Iron and steel. Indias capacity could potentially go up to 293 million tonnes by 2020.

Comparison with China and Other Countries

All the major Iron and Steel producing countries and regions showed double-digit growth in 2010. The European Union and North America had higher growth rates due to the lower base effect from 2009 while Asia and the CIS recorded relatively lower growth. In December 2010, world crude steel production for the 66 countries reporting to the World Steel Association was 116.2 mmt(report as of 21 Jan 2011), an increase of 7.8% compared to December 2009. The crude steel capacity utilisation ratio of the 66 countries in December 2010 declined slightly to 73.8% compared to 75.2% in November 2010. Compared to December 2009, the utilisation ratio in December 2010 is 1.1 percentage points higher.

Top 10 steel-producing countries

Rank
1 2 3 4 5 6 7 8 9 10

Country
China Japan US Russia India South Korea Germany Ukraine Brazil Turkey

2010
626.7 109.6 80.6 67.0 66.8 58.5 43.8 33.6 32.8 29.0

2009
573.6 87.5 58.2 60.0 62.8 48.6 32.7 29.9 26.5 25.3

%2010/2009
9.3 25.2 38.5 11.7 6.4 20.3 34.1 12.4 23.8 14.6

Source: World Steel Association (worldsteel) Annual production for Asia was 881.2 mmt of crude steel in 2010, an increase of 11.8% compared to 2009. Its share of world steel production increased to 65.5% in 2010 from 63.5% in 2009. China's crude steel production in 2010 reached 626.7 mmt, an increase of 9.3% on 2009. China's share of world crude steel production declined from 46.7% in 2009 to 44.3% in 2010. Japan produced 109.6 mmt in 2009, 25.2% higher than 2009. In 2010, South Korea's crude steel production was 58.5 mmt, a 20.3% growth compared to 2009. The EU recorded an increase of 24.5% compared to 2009, producing 172.9 mmt of crude steel in 2010. However, crude steel production in the UK and Greece continued to decline in 2010. In 2010, crude steel production in North America was 111.8 mmt, an increase of 35.7% on 2009. The US produced 80.6 mmt of crude steel, 38.5% higher than 2009. The CIS showed an increase of 11.2% in 2010, producing 108.4 mmt of crude steel. Russia produced 67 mmt of crude steel, an 11.7% increase on 2009 and Ukraine recorded an increase of 12.4% with a year-end figure of 33.6 mmt.

of world crude steel production 2009, 2010

Source: World Steel Association (worldsteel)

Global Crude Steel production

YoY(%) growth in crude steel production- India and China

LIMITATION

However, the public sector is expanding its capacities but, it has more potential lies within to perform more than that. Utilization of capacities in public sector is more than that of private sector but the performance still has to be improved. Public sector has increased its profit over the year particularly in 2006-07. Both the companies are planning to adopt modern technology which is going to help them to compete in world market but they need to be less dependent on state of art technology and coal for long term prospects.

Public sector has undergone retrenchment for the employees and improved has its lobour productivity but it is still lacking behind as compared to private sector.

SAIL has reduced the no. of accidents due to improper handling of machinery still no of accidents are more than that of TATA Steel. Most of the plans to achieve the significant position in world market will remain on paper unless adequate attention is given to augmentation of infrastructure i.e. roads, ports, railways, power, etc.

These areas are of prime concern and the policy envisages a High Level Monitoring Group which will not only prepare action plans in consultation with the concerned Ministries but also coordinate development of the required facilities. There are tremendous challenges ahead of us but these have to be met comprehensively if we are to take our legitimate place in the world as a developed nation by 2020.

Conclusion
It is globally recognised hat Indian economy is growing at a very high rate presently and the demand for steel is also showing an upward trend. As of 2010 Indian steel Industry is 5th largest in the world, with the kind of investment in this sector it is projected that Indian steel industry iwill be 2nd largest in the world. So, we believe, for the sake of nation and economic growth, growth of Indian iron and steel industry is a must. This is possible only with the active support of the Government with the effort to make this sector grow and make it more eco-friendly, which will help the sectors to meet success only if competent authorities take up the developmental jobs in proper spirit.

BIBLIOGRAPHY
1. Ministry Of Steel(2009-10) Annual Report Iron and Steel Industry 2. Narayanswamy A Managerial Perspective Financial Accounting 3. Iron and Steel Review (1998) 4. Market segmentation Online Magazine Metal Bulletin 5. www.Capitaline.com 6. www.MySteel.com 7. www.sail.com 8. www.SteelWorld.com 9. www.steel.nic.in 10. www.worldsteel.org
11.http://planningcommission.nic.in/aboutus/committee/wrkgrp11/wg11_stee l.pdf