COMPANY BASED RESEARCH PROJECT
ON
Prepared By Name: Gaurav Tripathi Program: PGDM (2016-18) Batch Section: Omega Roll No: 409 New Delhi Institute of Management
INTRODUCTION JSPL is an industrial powerhouse with a dominant presence in steel, power, mining and infrastructure sectors. Part of the US $ 18 billion OP Jindal Group this young, and responsive company is constantly expanding its capabilities to fuel its fairy tale journey that has seen it growth to a US $ 3.3 billion. The company has committed investments exceeding US $ 30 billion in the future and has several business initiatives running simultaneously across continents. Mr. Naveen Jindal, the youngest son of the legendary Shri O.P. Jindal, the company produces economical and efficient steel and power through backward and forward integration. JSPL today sports a product portfolio that caters to markets across the steel value chain. The company produces the world's longest (121-meter) rails and it is the first in the country to manufacture large-size parallel flange beams. JSPL operates the largest coal-based sponge iron plant in the world and has an installed capacity of 3 MTPA (million tons per annum) of steel at Raigarh in Chhattisgarh. Also, it has set up a 0.6 MTPA wire rod mill and a 1 MTPA capacity bar mill at Patratu, Jharkhand, a medium and light structural mill at Raigarh, Chhattisgarh and a 2.5 MTPA steel melting shop and a plate mill to produce up to 5.00-meter-wide plates at Angul, Odisha. Alongside contributing to India's growth story the company is driving an ambitious global expansion plan with its sights set on emerging as a leading transnational business group. The company continues to capitalize on opportunities in high growth markets, expanding its core areas and diversifying into new businesses. In Oman (Middle East), the company has set up a US $ 500 million, 1.5 MTPA gas-based Hot Briquetted Iron (HBI) plant. It has now added a 2 MTPA integrated steel plant. In Africa, the company has large mining interests in South Africa, Mozambique, Namibia, Botswana and Mauritania and is expanding into steel, energy and cement. The company endeavors to strengthen India's industrial base by aiding infrastructural development, through sustainable development approaches and inclusive growth. It deploys its resources to improve infrastructure, education, health, water, sanitation, environment and so on in the areas it operates in. It has won several awards for its innovative business and social practices. It has won several awards for its innovative business and social practices.
INTRODUCTION JSPL is an industrial powerhouse with a dominant presence in steel, power, mining and infrastructure sectors. Part of the US $ 18 billion OP Jindal Group this young, and responsive company is constantly expanding its capabilities to fuel its fairy tale journey that has seen it growth to a US $ 3.3 billion. The company has committed investments exceeding US $ 30 billion in the future and has several business initiatives running simultaneously across continents. Mr. Naveen Jindal, the youngest son of the legendary Shri O.P. Jindal, the company produces economical and efficient steel and power through backward and forward integration. JSPL today sports a product portfolio that caters to markets across the steel value chain. The company produces the world's longest (121-meter) rails and it is the first in the country to manufacture large-size parallel flange beams. JSPL operates the largest coal-based sponge iron plant in the world and has an installed capacity of 3 MTPA (million tons per annum) of steel at Raigarh in Chhattisgarh. Also, it has set up a 0.6 MTPA wire rod mill and a 1 MTPA capacity bar mill at Patratu, Jharkhand, a medium and light structural mill at Raigarh, Chhattisgarh and a 2.5 MTPA steel melting shop and a plate mill to produce up to 5.00-meter-wide plates at Angul, Odisha. Alongside contributing to India's growth story the company is driving an ambitious global expansion plan with its sights set on emerging as a leading transnational business group. The company continues to capitalize on opportunities in high growth markets, expanding its core areas and diversifying into new businesses. In Oman (Middle East), the company has set up a US $ 500 million, 1.5 MTPA gas-based Hot Briquetted Iron (HBI) plant. It has now added a 2 MTPA integrated steel plant. In Africa, the company has large mining interests in South Africa, Mozambique, Namibia, Botswana and Mauritania and is expanding into steel, energy and cement. The company endeavors to strengthen India's industrial base by aiding infrastructural development, through sustainable development approaches and inclusive growth. It deploys its resources to improve infrastructure, education, health, water, sanitation, environment and so on in the areas it operates in. It has won several awards for its innovative business and social practices. It has won several awards for its innovative business and social practices.
VISION
To be a globally admired organization that enhances the quality of life of all stakeholders through sustainable industrial and business development.
MISSION
We aspire to achieve business excellence through:
The spirit of entrepreneurship and innovation.
Optimum utilization of resources.
Sustainable environment friendly procedures and practices.
The highest ethics and standards.
Hiring, developing and retaining the best people.
Maximizing returns to stakeholders.
Positive impact on the communities we touch.
GROUP COMPANIES & SUBSIDIARIES
Jindal Steel and Power Ltd.
Jindal Power Ltd.
Jindal Petroleum Ltd.
Jindal Bolivia Ltd.
Jindal Cement.
Jindal Power Trading Company Ltd.
JSW (Jindal Steel Works)
JSW Steel Ltd.
JSW Energy Ltd.
JSW Holdings Ltd.
JSW Infra and Logistics.
JSW Salem Works.
JPOCL (Jindal Praxair Oxygen Company Ltd).
JSOFT Solutions Ltd.
JSW Building Systems.
JSW Bengal Steel Ltd.
Jindal Stainless
JSW Stainless Ltd.
PT Jindal Stainless, Indonesia.
Jindal Stainless Steel way Ltd.
Jindal Architecture Ltd.
Jindal steel Italia Ltd.
Parivartan City Infra.
Jindal SAW Ltd.
Jindal SAW USA, LLC
Jindal ITF Ltd.
SV Trading Ltd.
Hexa Securities and Finance Ltd.
Jindal Metal and Alloys Ltd.
BOARD OF DIRECTORS
Smt. Savitri Jindal
Chairperson Emeritus
Mr. Naveen Jindal
Chairman
Ms. Shallu Jindal
Director
Mr. Ravi Uppal
Managing Director & Group CEO
Mr. R.V. Shahi
Independent Director
Mr. Arun Kumar Purwar
Independent Director
Mr. Arun Kumar
Independent Director
Mr. S K Garg
Independent Director
Mr. Rajeev Bhadauria
Wholetime Director
Mr. D. K. Saraogi
Wholetime Director
Mr. Hardeep Singh Wirk
Independent Director
Mr. Shalil Mukund Awale
Nominee Director – IDBI Bank Ltd.
ORGANIZATIONAL STRUCTURE
Mr. Naveen Jindal Mr. Ravi Uppal Mr. Anand Goel Mr. N. A. Ansari Mr. K Rajagopal Mr. Virendra Kumar Mehta
Chairman. Managing Director & Group CEO. Chief Advisor. CEO, Jindal Shadeed, Oman. Group Chief Financial Officer& Director. Director, Sales & Marketing.
Mr. Rajeev Bhadauria
Director Group HR.
Mr. Rajesh Bhatia
CEO-Global Business
Mr. S. Bandyopadhyay Mr. Jona Pillay Mr. Manish Kharbanda Mr. Pankaj Gautam Mr. Rakesh Kumar Mr. D.K. Saraogi Mr. Bharat Rohra Hervinder Singh Mr. TS Shanbhougue
Executive Director & Chief Technology. Executive Director – Steel Products. Executive Director & CEO-Mines & Minerals. Executive Director-Projects & Operations JSPL (Raigarh). Executive Director – Operational Excellence. Executive Director (Angul). Project Director- Phase 1B Projects (Angul). Business Head JSPL (Jharkhand). Head – JSPL (Barbil)
OVERVIEW AND GOVERNANCE
Corporate governance provides a structure that works for the benefit of everyone concerned, by ensuring that the enterprise adheres to ethical standards, laws and accepted best practices. It imbibes the basic business ethics and values that need to be adhered to in letter and spirit. The Corporate Governance framework of the Company is based on the following broad practices:
Engaging a diverse and highly experienced Board of Directors, with expertise in industry, finance, management and the law;
Deploying well defined governance structures that establishes checks and balances and delegates decision making to appropriate levels in the organization.
Adoption of transparent and robust systems, processes, policies and procedures;
Making high levels of disclosures for dissemination of corporate, financial and operational information to all its stakeholders;
Having strong systems and processes to ensure full and timely compliance with all legal and regulatory requirements.
This framework is implemented through a combination of Strategic Governance Structure and an Operational Governance Structure, in the following manner:
Strategic Governance Structure
This incorporates the deployment of a high level Group Executive Committee (GEC), Core Management Team (CMT) and a Senior Management Committee (SMC), all with individual and collective roles and responsibilities. Operational Governance Structure
This incorporates the deployment of high level Management Committees (MANCO) for each business segment and Unit Committees (UNICO) at each location. Continuous meetings and deliberations at these levels ensures timely and appropriate decision making and helps drive collective change in an efficient and effective manner.
PRODUCTS AND SERVICES
RAILS Grades: IRS 52, UIC 54, UIC 60, CR 80 & CR 100. Size Range: Up to 121 meters. Applications: Railway tracks, Railway siding of power plants, refineries, crane rails for port
and harbors, factories, mines, launch pads and shipyards.
PARALLEL FLANGE BEAMS Grades: UB, NPB, WPB and IPE series. Size Range: 180mm to 900mm. Applications: Refineries, airports, flyovers, metro rail projects, shopping malls, power
plants, stadium, steel plants, industrial sheds and among others.
TMT REBARS Grades: 500, 500D, 550, 550D, 600 & CRS. Size: 6mm to 40mm Applications: Concrete re-enforcement structures, bridges, flyovers, dams, industries, roads
and tunnels, used in coastal areas and earthquake zones.
WIRE RODS Grade: MS, MC& HC, EQ, Boron and other Alloy Steel. Size: 5.5mm to 22mm. Applications: Bolts, Rivets, screws, general purpose wires, electrode wires, industrial wires,
agriculture wire, staple pin wires, pre-stressed concrete wires, spring and rope wires, needle wires, safety pin wires, earth wires etc.
ANGLES AND CHANNELS Angles: 50mm to 250mm Channels: 100mm to 400mm
Applications: Power Sector, infrastructure construction, steel and cement plant construction, telecom line tower, bus/truck body construction, industrial sheds, commercial and individual houses and others.
FABRICATED STRUCTURE Grades: H-type beams, I-type beams, Box sections and Star columns. Dimensions: Depth- 350mm to 3000mm, Flange Width- 250mm to 1000mm, Length- 3 to
18m, Flange thickness- 6mm to 80mm. Applications: Large support columns and beams for manufacturing and process plants,
airports, high rise buildings, power plants, stadium and flyovers.
COMPETITIORS
SAIL (Steel Authority of India)
Tata Steel
ESSAR
JSW
Jindal Steel and Power
RINL (Rashtriya Ispat Nigam Ltd.)
Bhushan Steel
S. NO.
Company Name
Annual production in MTPA
1.
Steel Authority of India
26
2.
Tata Steel
23.3
3.
ESSAR
14
4.
JSW
10
5.
Jindal Steel and Power
3
6.
RINL
2.820
7.
Bhushan Steel
2.3
GEOGRAPHICAL SPREAD
INDIA
Raigarh.
Tamnar.
Raipur.
Jindal Industrial Park.
Angul.
Tensa.
Patratu.
INTERNATIONAL
Africa.
Melmoth.
Mozambique.
Botswana.
Tanzania.
Madagascar.
Namibia.
Mauritania.
Senegal.
Australia.
Indonesia.
Oman (Middle East).
KEY AREAS
Supply
With trade barriers having been lowered over the years, imports play an important role in the domestic markets.
Demand
The demand is derived from the sectors that include infrastructure, consumer durables and automobiles.
Barriers to entry
High capital costs, technology, economies of scale, government policy.
Bargaining power of suppliers
Low for fully integrated players who have their own mines for raw materials. High, for non-integrated players who have to depend on outside suppliers for sourcing raw materials.
Bargaining power of customers
High, presence of a large number of suppliers and access to global markets.
Competition
High, presence of a large number of players in the unorganized sector, Imports from China, Russia and FTA Countries such as Japan, South Korea.
Financial Year ‘15
Indian steel industry faced several challenges during the year. On the other hand the finished steel imports surge by 70% especially from the surplus economies of China, Korea, Japan and Russia. Korea & Japan enjoys reduced the import tariffs under the Free Trade Agreement (FTA) with India. At the same time finished steel exports from India also decreased by 8.1% YOY to 5.5 MT. Resultant steel trade dynamics, subdued demand and declining raw material prices have driven global steel prices lower and impacted profitability of steel companies.
During the FY 15, the performance of the Indian companies operations was adversely impacted by the regulatory uncertainties in the mining sector. For the first time, several of its critical mines remained closed for varying periods, causing immense stress on operations. This led to supply and production disruptions and impacted the cost structure.
World crude steel production grew at 1% reaching 1,665 MT in 2014, as per World Steel Association (WSA). The global steel industry continues to face problems of large surplus capacity. This meagre demand growth was also recorded only due to some pickup in the demand from the advanced economies. The growth in production is coming mainly from Korea which grew by 7.5%. China’s crude stee l production increased merely by 0.1% YoY to
822.7 MT in 2013. The EU and US recorded a growth of 1.7% compared to 2013.
Prospects Global economic growth indicators are moderately positive, but the volatility in energy prices, currency adjustments, swings in capital flows can potentially impact emerging economies. The IMF forecasts world economy to expand at 3.5% this year and 3.8% in 2016, terming global growth prospects as moderate and uneven in its latest April 2015 World Economic Outlook. The growth in advanced economies, aided by fall in oil prices, is projected to strengthen, for the third year in a row, to 2.4% in CY 2015 compared to 1.8% in CY 2014.
The global steel demand in CY 2015 is expected to increase by 0.5% to 1,544 MnT, while in CY 2016 it is projected to grow by 1.4% to 1,566 MnT. Steel demand in the developed economies is projected to grow by 0.2% in CY 2015 and by 1.8% in CY 2016. Chinese steel demand is projected to record a negative growth of 0.5% in CY 2015 as well as in CY 2016.
Indian steel demand is expected to reflect improving macro-economic environment. Steel end use sectors are expected to perform better compared to previous financial year. Infrastructure projects like dedicated freight corridor etc., are gaining momentum and the steady decline in stalled projects coupled with hike in import duty in both flat and long products should stimulate steel demand. Recent weakness in Indian rupee has also helped competitiveness of domestic steel players. However, steel prices are expected to remain under pressure from Chinese exports and increased domestic competitiveness.
Indian economy is among a few economies globally for which economic growth forecast has been raised by the IMF. The IMF has raised its India GDP growth estimates for FY 2015-16 to 7.5%. In 2015-16, steel demand is expected to grow by 6% to 7%. However, a much sharper than expected increase in inflation and higher than budgeted fiscal consolidation are the key downside risks to the outlook.
MARKET SHARE
Net Sales
0% 4% 4%
9%
Jindal Steel Gallantt Ispat Tata Sponge Orissa Songe Sarda Energy 83%
SHAREHOLDING PATTERN
70
60
61.89
50
40 Percentage of Shares 30
21.08
20
17.02
10
0 PROMOTERS
INSTITUTIONS
NON-INSTITUTIONS
Interpretation
Promoters has a major stake in Jindal Steel & Power which includes Individuals, Banks, Corporate Bodies, and Central & State Governments.
OPERATING PROFIT RATIO
3105.69
2016 2177.24
5459.82
2015 3705.68
5456.83
2014 3758.86
5994.41
2013
3938.45
6793.17
2012 4062.49
0
1000
2000
3000
4000
Consolidated Op Profit
5000
6000
7000
8000
Standalone Op Profit
Interpretation
Operating margin or operating profit margin measures what proportion of a company’s
revenue left over, after deducting direct costs and overhead and before taxes and other indirect costs such as interest. Operating margin is used to measure company’s prici ng
strategy and operating efficiency. It gives an idea of how much a company makes (before interest and taxes) on each rupee of sales. Operating profit margin is highest in the year 2012 for Standalone and Consolidated Operating Profit and lowest in the year 2016.
NET PROFIT RATIO
5000 4000 4002.27 3000 2911.62 2000
2110.65
1893.8
1592.55
1000
1291.95
0 March'12
March'13
March'14
-1000
-310.68 March'15
March'16 -1018.88
-1454.59 -1998.62
-2000 -3000 Standalone
Consolidated
Interpretation
The net profit percentage is the ratio of after-tax profits to net sales. It is a measure of the profitability of the company after deducting all of its costs, administration expenses and financial from the sales and income taxes. The Net-Profit Margin of Jindal Steel and Power Ltd is continuously decreasing in the last 5 years as shown in the above chart.
EARNING PER SHARE
50
42.4
40 31.1 30 20.9 20 10 0 March'12
March'13
March'14
March'15
March'16
-14
-10
-20.8 -20 -30 Series 1
Interpretation
The earnings per share ratio (EPS ratio) measure the amount of a company's net income that is theoretically available for payment to the equity holders. A company with high earnings per share ratio is capable of generating a significant dividend for investors, or it may plow the funds back into its business for more growth; in either case, a high ratio indicates a potentially worthwhile investment, depending on the market price of the stock. The above figure clearly shows the earning per share of Jindal Steel & Power Ltd. There is continuous falling down in EPS in the last 5 years. The highest EPS is 42.4 million in the year 2012.
DIVIDEND PAYOUT RATIO
8 7.2
7 6 5.1
5 4
3.8
3 2 1 0 March'12
March'13
March'14
0 March'15
0 March'16
Dividend Payout Ratio
Interpretation
Dividend payout ratio is the amount made by a company to its stakeholders usually as a distribution of profits. When a company makes profit it can either re-invest it in the business or distribute to its shareholders by a way of dividends. It is the amount of dividend paid to shareholders relative to the amount of total net profit of a company. A reduction in dividend paid is not appreciated by the investors and usually the stock price moves down as this could point towards difficult times ahead for the company. On the other hand a stable dividend payout ratio indicates a solid dividends policy by the company’s
management. Jindal Steel & Power Ltd. Is not paying any dividend to its stakeholders in 2015-2016.
DEBT EQUITY RATIO
8000 6935.11
7000
6130.83 6000
5522.46
5000 4246.97
4097.73
4000
3905.71
3773.78 3397.2
3194.35 3000
2481.31
2000 1000 0 March'12
March'13
March'14 Standalone
March'15
March'16
Consolidated
Interpretation
Debt' is the book or market value of interest-bearing financial liabilities such as debentures, loans, redeemable preference shares, bank overdrafts and finance lease obligations. 'Equity' is the book value of share capital and reserves (i.e. equity section of the balance sheet) or the market value of equity shares (i.e. market capitalization) Debt Equity Ratio of Jindal Steel & Power Ltd is decreasing continuously decreasing as shown in the above chart.
STPs
STP
Segment
Mining, Power Generation and Infrastructure, Ferro Chrome, Sponge Iron, Petroleum, Cement
Target
Construction, Oil & Gas, Transportation, Refining, Telecom, Ship Building,
Group
Power, Automobiles, Capital Goods, Consumer Durables and Infrastructure Sector.
Positioning
One of the most prestigious and dynamic business group in the World
MAJOR COMPETITORS
Name
Last Price
Market Cap. (Rs
Sales Turnover
Net Profit
Total Assets
in Cr) Jindal Steel
85.30
7,804.13
12,734.80
-1,018.88
35,356.50
Gallant Ispat
582.40
2,241.17
534.96
28.59
458.87
Tata Sponge
611.25
941.33
573.53
30.83
807.46
Sarda Energy
164.10
590.40
1,035.21
37.55
1,422.04
Monnet Ispat
23.45
470.80
1,853.81
-1,683.23
8,662.56
Gallantt Metal
42.75
347.65
673.50
41.58
372.58
Godawari Power
52.20
170.99
1,538.89
-63.39
1,875.10
Gyscoal Alloys
70.30
111.27
159.33
-13.25
173.27
MSP Steel
11.25
99.11
904.52
-178.44
1,728.24
7.80
96.33
467.17
-289.05
2,722.87
Jai Balaji Ind
10.20
85.10
1,212.57
-666.12
2,495.47
Vaswani Ind
8.95
26.85
237.51
1.16
126.79
Ankit Metal
1.65
23.28
962.09
-357.20
1,510.13
Adhunik Metalik
SWOT ANALYSIS
Strength:
Highly equipped and modern technological manufacturing plant.
Using highly competitive Raw material
Customer Satisfaction through supplying product in time
Providing good services to customer
Skilled and highly Experienced Department Heads.
Weakness: -.
Less scope for diversification of product.
Weak performance on the back of the higher raw material cost and the power & fuel cost.
Opportunity:
Growing Steel and Power Industry
Availability of skilled labours and policy Support.
Huge export opportunity
Availability of well connected road network.
Threats:
Fluctuating policies of the government and ecological imbalances.
Competitors.
PESTEL ANALYSIS Indian steel is doing well from many years. Steel industry is contributing near about 1.2% in the total GDP. Because of the industrial growth and other important developments happening all over the world the so rapid rise in demand of the steel is observed in this sector. The major players in the steel industry are SAIL (Steel Authority of India.), TATA STEEL, ESSAR STEEL and JINDAL STEEL & POWER.
Indian steel mainly contributes in the finished steels, semi-finished steel, pig iron and stainless steel. Private sector plays very important role in the Indian steel industry. The private sector in the steel industry contributes approximately 2/3rd of the total market of the steel. Asian countries are in the lead with the production of the steel, China is the top producer among the Asian countries which are contributing high a supply of the steel in the international market.419million ton of the steel is produced only in the China. In past 6 years there are many acquisitions and mergers are happening in the steel industry. May be this could be the one of the reasons behind this tremendous growth globally. After the china country, Japan, India, and South Korea. India is contributing total of the 53million ton steel in global market. The japan is producing only 9% of the steel which is contributed to the global steel market. India is also one of the major counties in the production of the steel. The east, south, and west regions are important for the steel industry in India. In India because the vast availability of resources and major industry players India is enjoying the boom in this sector which are responsible of the growth in the GDP. The opening up the economies in the global market is responsible for the high investment in the industry sector where lots of acquisitions and mergers are happening in the industry. The PESTEL ANALYSIS of the industry is divided into five parts which can be discussed as follows: P- Political analysis E- Economic analysis S- Socio-culture analysis T- Technological analysis E- Environmental analysis L- Legal analysis.
POLITICAL ANALYSIS:
Political analysis includes the factors which can influence the business. It is included the political factor which includes the policy offered by the government to the specific sector. Here for this sector government introduces the National Steel Policy. The main aim for the introduction of this policy is to fill the gap between the demand and supply of the steel. To increase the production up to million ton is also the main objective of the policy. Under this policy the special incentives are designed for the steel sector. Incentives like the cut in the duty, zero duty on imports, provision of the land and other infrastructural facilities are the facilities provided for the steel sector. Under this policy the government is encourage to the use the full opportunities available in the PUBLIC AND PRIVATE PATNERSHIP (PPP). With the growing industry the government is increased the sales tax from the 15% to 20% where as 75% FDI (foreign direct investment) is allowed in the industry this scheme also provides the various concessions in the custom duties. Though there is a rise in the infrastructure facilities in the country but considering the steel industry the present condition of the infrastructure is not sufficient in the nature .because of the lack in infrastructure steel industry is facing many problems.
ECONOMICAL ANALYSIS:
STEEL industry is concern to be a very booming industry from past decades. Opening up with the various economies the foreign direct investment is the happened in this sector the various foreign players are interested to invest in the country. Under the various economies schemes there is permission in advance licensing scheme which allows the duty free imports of raw material for exports. But, with the boom in the industry GDP is rising at very slow rate. The steel industry is also facing the problem of the subprime crisis occurs in the united states before 15 months. Because of the subprime crisis there is ill effect occurs in the automobile industry, infrastructure and other business which are related with the steel industry. There is huge gap between the demand and the supply of the steel in the society.
SOCIO- CULTURE ANALYSIS:
The socio culture is one of the important aspect in the analysis of the industry it describes the impact of the particular industry on the society. Likewise the steel industry also give the encouragement to the permanent employment to the people but on the other hand it divides the area in to the rural and urban sector because the industry is only in the particular area only which leads to the particular development of that area only and not overall the development because of the working conditions the people which are employed in the steel industry faced many health problems which are incurable in the nature and many industries are not paying the attention on the health of the employees. Any kind of the allowances are not given to the employees. Steel industry is also responsible for the development in the rural sector which leads to the rise in the standard of the living of the people.
TECHNICAL ANALYSIS:
The traditional technologies are being used from many years in the industry. There is no innovation in the use of the technique in the production process. The Tata steel is developing the same technique is by which the encouragement is given to the trading of the steel. Tata and sail introduces the online trading of the steel. Only the electric furnace is being used now days in the production process but because of the fluctuations in the energy there is wastage in the raw material. The basic technologies are used in the production process are basic arc, induction furnace and electric furnace which are outdated in the nature. Sail the one of the leading steel industry India is planning to set up a plan with PASCO for using the latest technology.
ENVIRONMENTAL ANALYSIS:
Though the steel industry is encouraging the many sectors and the encouraging the development it is creating the unfavorable environment in the nature. The all leading industries are following the environmental acts which are declared by the governments, though it is creating very bad impact on the environment. Many industries are using the pollution control equipment and energy saving equipment but that is not sufficient in the nature. The least importance is given to the environmental aspect. But the Tata steel is
encouraging the ecofriendly system, to reduce the emission the carbon dioxide during the production process.
LEGAL ANALYSIS:
Government is introducing the various rules and regulations of this particular industry. The government is about to paying the more attention in the health policies of the employees which are working with the steel industry. Special health incentives and rules are introduced in the steel industry.
4 P’s Analysis
JINDAL STEELS PRODUCTS 1. PRODUCT: -
Hot Rolled products:
HR Coil, HR plate and sheet. Applications: Automobile, Boiler and Pressure Vessels, Ship Building, Railways, Transmission Towers, Oil and Petro Chemicals, Marine Containers, Coal and Mining General and Heavy Engineering
Cold Rolled Products:
CR coil and Sheet Applications: Automobile, White good, Cold rolled formed section, General engineering & fabrication, Packing, Drums/ barrels, Furniture
Galvanized Product:
Galvanized Corrugated Sheet, GP Sheet and Coil Applications: Automobile, Boiler and Pressure Vessels, Ship Building, Railways, Transmission Towers, Oil and Petrochemicals, Marine Containers, Coal and Mining, General and Heavy Engineering.
Pre-Painted Galvanized Product:
PPGI coil, PPGI sheet, PPGI profile Application: Roof, Wall cladding and other building products, Household appliances, Furniture, Automotive.
2. 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 firm’s 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
3. PLACE
Place represents the location where a product can be purchased. But in industrial marketing place is often referred to as the distribution channel. Distribution Channels at Jindal Steel:
Jindal Steel has launched Jindal Shoppe to markets its steel products as compared to products launched by TATA Steel. The exclusive Jindal showrooms retail all types of Jindal steel, ranging from HR coil to color-coated steel. JINDAL 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. Jindal 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.
4. 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.
BACKGROUND OF THE INDUSTRY
JSPL is an industrial powerhouse with a dominant presence in steel, power, mining and infrastructure sectors. Part of the US $ 18 billion OP Jindal Group this young, and responsive company is constantly expanding its capabilities to fuel its fairy tale journey that has seen it growth to a US $ 3.3 billion. The company has committed investments exceeding US $ 30 billion in the future and has several business initiatives running simultaneously across continents. Mr. Naveen Jindal, the youngest son of the legendary Shri O.P. Jindal, the company produces economical and efficient steel and power through backward and forward integration. JSPL today sports a product portfolio that caters to markets across the steel value chain. The company produces the world's longest (121-meter) rails and it is the first in the country to manufacture large-size parallel flange beams. JSPL operates the largest coal-based sponge iron plant in the world and has an installed capacity of 3 MTPA (million tons per annum) of steel at Raigarh in Chhattisgarh. Also, it has set up a 0.6 MTPA wire rod mill and a 1 MTPA capacity bar mill at Patratu, Jharkhand, a medium and light structural mill at Raigarh, Chhattisgarh and a 2.5 MTPA steel melting shop and a plate mill to produce up to 5.00-meter-wide plates at Angul, Odisha. Alongside contributing to India's growth story the company is driving an ambitious global expansion plan with its sights set on emerging as a leading transnational business group. The company continues to capitalize on opportunities in high growth markets, expanding its core areas and diversifying into new businesses. In Oman (Middle East), the company has set up a US $ 500 million, 1.5 MTPA gas-based Hot Briquetted Iron (HBI) plant. It has now added a 2 MTPA integrated steel plant. In Africa, the company has large mining interests in South Africa, Mozambique, Namibia, Botswana and Mauritania and is expanding into steel, energy and cement. The company endeavors to strengthen India's industrial base by aiding infrastructural development, through sustainable development approaches and inclusive growth.
GROUP OF COMPANIES
Jindal Steel and Power Ltd.
Jindal Power Ltd.
Jindal Petroleum Ltd.
Jindal Bolivia Ltd.
Jindal Cement.
Jindal Power Trading Company Ltd.
JSW (Jindal Steel Works)
JSW Steel Ltd.
JSW Energy Ltd.
JSW Holdings Ltd.
JSW Infra and Logistics.
JSW Salem Works.
JPOCL (Jindal Praxair Oxygen Company Ltd).
JSOFT Solutions Ltd.
JSW Building Systems.
JSW Bengal Steel Ltd.
Jindal Stainless
JSW Stainless Ltd.
PT Jindal Stainless, Indonesia.
Jindal Stainless Steel way Ltd.
Jindal Architecture Ltd.
Jindal steel Italia Ltd.
Parivartan City Infra.
Jindal SAW Ltd.
Jindal SAW USA, LLC
Jindal ITF Ltd.
SV Trading Ltd.
Hexa Securities and Finance Ltd.
Jindal Metal and Alloys Ltd.
Key Focus Areas
Reduce dependence on thermal coal by going through BoF route.
Operational Efficiency with an aim to Reduce overall cost in Steel Production
Commissioning of Head Hardening Rail Project in Raigarh.
Optimize capacity utilization of Angul and Patratu plants.
Increase Retail Steel products sales in contiguous states.
Factors that Lead to Growth of the Company
Production and on time delivering quality products that conform to our customers’
requirements.
Continually improving our systems and processes by value addition and product development through innovation.
Up gradation of relevant technology for continuing suitability to the changing needs of the organization and ensure training and development of the employees.
Involving
all
employees
for
implementing
and
continually
improving
the
effectiveness of the quality management system.
Periodically reviewing the policy and quality objectives and communicating across the organization to align with the business requirements.
Training and motivating all employees to ensure that the entire corporation is equipped and capable of achieving quality objectives.
The Human Resource Management
Human Resource Development (HRD) is the frameworks for helping employees develop their personal and organizational skills, knowledge, and abilities. Human Resource Development
includes
such
opportunities
as
employee
training,
employee
career
development, performance management and development, coaching, mentoring, succession planning, key employee identification, tuition assistance, and organization development. The focus of all aspects of Human Resource Development is on developing the most superior workforce so that the organization and individual employees can accomplish their work goals in service to customers. Organizations have many opportunities for human resources or employee development, both within and outside of the workplace.
This shift in the way human resources are treated has come about due to the prevailing notion that human resources are sources of competitive advantage and not merely employees fulfilling their job responsibilities. The point here is that the current paradigm in HRD treats employees as value creators and assets based on the RBV or the Resource Based View of the firm that has emerged in the SHRM (Strategic Human Resource Management) field. One reason for the emergence of the RBV or the SHRM paradigm is that with the advent of the service sector and the greater proportion of companies in the service sector, employees are not merely a factor of production like land, labor and capital but in fact, they are sources of competitive advantage. As a matter of fact, many IT and Financial Services companies routinely refer to employees as the value creators and value enhancers rather than just resources doing their job. The field of HRD now has taken on a role that goes beyond employee satisfaction and instead, the focus now is on ensuring that employees are delighted with the working conditions and perform their jobs according to their latent potential which is brought to the fore. This has resulted in the HRD manager and the employees of the HRD department becoming partners in the organization’s progress.
Challenges Faced By the Company
With increasing competition, the company faces too many risks.
Having large number of substitutes, the company cannot charge more from the prospective customer, so the profit margin is reduced
By using the new and advanced technology the cost of providing the service has increased and that is why the company is restricted on generating limited revenue
Rising input costs for cement and other materials
Longer working capital cycle
Shortage of skilled manpower
Big and powerful competitors with large revenue
Rivalry among the existing competitors in the industry is high.
