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INDUSTRIAL VISIT REPORT On THE DISTRIBUTION CHANNEL OF ALUMINIUM EXTRUSION For HINDALCO INDUSTRIES LIMITED

Hindalco Final Project III - Copy

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INDUSTRIAL VISIT REPORT

On

THE DISTRIBUTION CHANNEL OF ALUMINIUM EXTRUSION

For

HINDALCO INDUSTRIES LIMITED

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Submitted To Submitted By

Mr O P Jakhar(HOD) Pawan Singh Shekhawat

Mr A K Purohit(LME) B.Tech (Final Year)

ACKNOWLEDGEMENT

I am happy and want to give regard to those person with whom I have learned and accomplished my present task I am very grateful for those person who have given essential contribution for completing my project as well as which is need for beginning to my carrier

With the great pleasure as well as great regard .I want to express hardly to Mr.S.K.DAS (Manager Training &development center) Mr Ajay Jauhari (DGM) who has given the chance for doing summer training in sales department of “HINDALCO INDUSTRIES LIMITED”, RENUKOOT.

I express my sincere thanks to Mr O P Jakhar (HOD) , ,Mr S S Rathore(LME), Mr R S Rathore(LME) Mr A K Purohit(LME) and also department for their support and encouragement.

I thank my professors, seniors and friends at ENGINEERING COLLEGE BIKANER for their support and encouragement throughout the Practical training and also for my report.

I would also like to give regard to Mr.Manvir Ajad who has given me timely instruction and provided suitable path with suggestion which was useful for completing my project.

I will always remember their contribution for leading me all possible co-operation.

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PREFACE

I have covered my industrial visit report under the “DISTRIBUTION CHANNEL” which is of HINDALCO, EXTRUSIONS, which is first truly “MNC” of INDIA. This report has been written in response to comprehensive study conducted on the “DISTRIBUTION CHANNEL” OF “HINDALCO INDISTRIES LIMITED”. This report mentions and evaluated the various aspect, pertaining to the distribution channel of the company.

I am confident that anyone who goes through the report will learn how much be I learn & benefited during this summer training period.

Pawan Singh Shekhawat B.Tech (Final Year) ECB-BIKANER

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TABLE OF CONTENT

Introduction Company Profile Aims & Objectives Objectives Of The Study Problems & Limitations Conclusion Bibliography

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INTRODUCTION OF HINDALCO

Hindalco Industries Limited, the metals flagship company of the Aditya Birla Group, is an industry leader in aluminium and copper. A metals powerhouse with a consolidated turnover in excess of US$ 14 billion, Hindalco is the world's largest aluminium rolling company and one of the biggest producers of primary aluminium in Asia. Its copper smelter is the world's largest custom smelter at a single location.

Established in 1958, Hindalco commissioned its aluminium facility at Renukoot in Eastern U.P. in 1962. Acquisitions and mergers with Indal, Birla Copper and the Nifty and Mt.Gordon copper mines in Australia, strengthened the company's position in value-added alumina, aluminium and copper products, with vertical integration through access to captive copper concentrates.

In 2007, the acquisition of Novelis Inc. a world leader in aluminium rolling and can recycling marked a significant milestone in the history of the aluminium industry in India. With Novelis under its fold, Hindalco ranks among the global top five aluminium majors, as an integrated producer with low cost alumina and aluminium facilities combined with high-end rolling capabilities and a global footprint in 12 countries outside India

INDUSTRY OVERVIEW

PROFILE OF ALUMINIUM INDUSTRY;

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The aluminium industries are highly concentrated, with just five plants accounting for the entire production capacity of 7, 02,000 tones per annum. The capacity and production figure for these producers are given below.

Company capacity (lakh tones) production (lakh tones) capacity utilization (%)Company Capacity

(lakh tones)Production(lakh tones)

Capacity utilization (%)

BALCO 1.00 0.96 96HINDALCO 2.48 3.89 103INDAL 1.17 0.44 37.18MALCO 0.25 0.02 0.06NALCO 2.18 2.13 97.56TOTAL 7.02 6.03 85.92

(Figures pertaining to the year (1999-2000)

The per capita consumption of aluminium in India is only 0.5kg.as against 25kg in USA, 19kg in JAPAN and 10kg in EUROPE. Even the world’s average per capital consumption about 10 times of that in India. One reason of low consumption in the country could be that consumption pattern of aluminium in India is vastly different from that of developed countries. The demand of aluminium is expected to grow about 9% per annum from present consumption levels. This sector is going through a consolidation phase and existing producers are in process of enhancing their production capacity so that demand supply gap expected in future is bridged. However, in India is a net exporter of alumina and aluminium metal at present.

SAILENT FEATURES OF ALUMINIUM INDUSTRY;

Highly concentrated industry in the country. Controlled by two private groups and one public sector unit. Bayer-half-herald. Technology used by all producers. Electricity, Coal, and Furnace oil are primary energy inputs. All plants have their own captive power units for cheaper and uninterrupted

power supply. Energy cost is 40% of manufacturing cost for metal and 30% for rolled products.

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Company Profile

THE SAGA OF RENUKOOT

HINDALCO Industries Ltd., one of the major producers of Primary Aluminium Metal and Semis in the country, is the biggest industrial enterprise of Uttar Pradesh. It is a public limited company in the private sector having about 39000 share holders. It is the largest integrated aluminium plant in India with all its production facilities viz. alumina, aluminium and fabrication located at Renukoot near Rihand Dam in Sonbhadra (U.P.). Hindalco Power Division is situated at Renu sagar about 35 Kms. from Renukoot. In September 1959, an Industrial License was granted by the Government for setting up an integrated aluminium plant at Renukoot,

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 With an initial installed capacity of 20,000 M.T. The construction work was completed within 18 months, a record for a major job of this kind. The dream of the great visionary Syt. G.D. Birla to locate an aluminium plant near Rihand Power House came true. The Late Prime Minister Pt. Jawaharlal Nehru formally inaugurated the plant in January 1963. Going round the extensive works, Panditji saw his dream of a brighter future of India take shape before his eyes. From the modest beginning in 1962, Hindalco has now become an industrial giant with a capacity to produce 2, 42,000 tones of aluminium per annum.

Renukoot, a fast growing and thriving industrial township, which is one humming with activities, and providing all the basics amenities of modern life to the inhabitants, was once a wild and desolate jungle infested by animals. From being one of the most backward areas of U.P. it has carved a place for itself on the industrial map of India and the world. Lying in the foothills of the Vindhya Range, Renukoot is about 160 Kms. from Varanasi and 154 Kms. from Mirzapur. There is a direct train between Amritsar to Tatanagar and Ranchi via Renukoot. This apart Renukoot is also connected with Calcutta by train, directly. Facing the giant man-made biggest artificial lake Govind Ballabh Pant Sagar, Renukoot is a picturesque township unscarred by the ravages of industrialization.

EXPANSION AND MODERNISATION

Hindalco is India's largest Aluminium producer with a Primary Aluminium Smelting capacity of 242,000 MTPA. The company's integrated operations include Power Generation Capacity of 612 MW and a 450,000 MTPA Alumina Refinery. Hindalco's semi fabrication facilities comprise of Rolled products 80,000 MTPA, Redraw Rods 40,000 MTPA, and Extrusions 13,700 MTPA.

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The company has opted for induction of the most modern technology and has undertaken comprehensive modernization over the past years. It includes commissioning of two Gas Suspension Claciners, three high efficiency PF/Fluidized Bed Boilers with co-generation facility and Micro Processors based Pot Control System. The Roding Room facilities have also been modernized. In the semi-fabrication, a state-of-the-art Vertical Billet Casting and Slab Casting facility have been installed. A new Rolling Mill has been commissioned and the existing Mills have undergone a comprehensive modernization. Hindalco has also installed a Roll Former, a Cut to Length Line, a Rewind Line and Tension Leveler in Rolling Mills.

Hindalco's products are well accepted in the domestic as well as international markets. The company's metal is accepted for delivery under the High Grade Primary Aluminium Contract on the London Metal Exchange. The Company's export efforts have led to recognition as a 'Star Trading House'. Hindalco is an ISO 9002 Company and has  also received ISO 14001 Certification for its entire operations including Power Plant and Mines. As a part of its diversification programmed, a 5,000 MTPA Aluminium Foil Plant and an Aluminium Alloy Wheel Plant of 300,000 w.p.a. capacity has been set up at Silvassa.

ACQUISITION OF INDAL

Hindalco has also acquired aluminium major - INDAL. Hindalco's holding in INDAL now stands at 74.62%. India strength in Aluminium and downstream aluminium products admirably dovetails Hindalco's unmatched presence in metal and collectively commands the highest meal capacity in the entire South East region.

MISCELLANEOUS INFORMATION

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In 1962 when production started, the Company had on its roll about 900 staff and workmen and the present strength of employees is about 14000. The Principal Office and Works is located at Renukoot and there are Zonal Sales Offices at Bangalore, Mumbai, Delhi, and Calcutta. The Company is managed by a Board of Directors and other senior executives.

Aims & Objectives

Company’s Vision

"TO STRENGTHEN OUR POSITION AS A PREMIUM ALUMINUM COMPANY, SUSTAINING DOMESTIC LEADERSHIP AND GLOBAL COMPETITIVENESS THROUGH INNOVATION,

QUALITY AND VALUE ADDED GROWTH"

Company’s Mission

To be a premium metals major, global in size and rich, with passion for excellence. To relentlessly pursue creation of superior shareholder value by exceeding customer expectation profitably, unleashing employee potential and being a responsible corporate citizen adhering to our value.

Integrity- Honesty in every action Commitment-Doing whatever it takes to deliver, as promised Passion-Missionary zeal arising out of an emotional engagement

with work Seamlessness-Thinking &Working together across functional

silos hierarchy levels, business and geographies Speed-Responding to stakeholders with a sense of urgency

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SPECIFIC INFORMATION OF THE ORGANISATION

The world largest company aluminium rolling company. World leader in viscose staple fiber. Fastest growing copper company in Asia. The Aditya Birla Group is the 11th largest cement producer in the world. Fourth largest producer of carbon black in the world. One of the biggest producers of primary aluminium in Asia. One of the lowest cost producers of aluminium in the world. ISO 9001:2000 and 14001 certified.

CopperBirla Copper, a unit of Hindalco is located at Dahej in Gujarat. The unit has the unique distinction of being the largest copper smelter in the world at a single location with 500,000 tpa capacity with multiple world class technologies. The facilities comprise copper smelters, precious metals, fertilizers, sulfuric acid, captive power plants, utilities and a captive jetty.

Hindalco's Birla Copper is a renowned producer of copper cathodes and continuous cast copper rods since its inception, with ISO-9001:2000 (Quality Management systems), ISO-14001:2004 (Environmental Management System) OHSAS-18001:2007 (Occupational Health and Safety Management Systems) accreditations

Production capacities Division Capacity and location

Alumina 700,000 tpa (Renukoot)

350,000 tpa (Belgaum)

180,000 tpa (Muri)

Aluminium 375,000 tpa (Renukoot)

143,000 tpa (Hirakud)

Extrusions 33,000tpa (Renukoot)

13,000 tpa (Alupuram)

Flat rolled products 100,000 tpa (Renukoot)

57,000 tpa (Belur)

50,000 tpa (Taloja)

30,000 tpa (Mouda)

Redraw rods 75,000 tpa (Renukoot)

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Foil and packing 30,000 tpa (Silvassa)

6,000 tpa (Kalwa)

4,000 tpa (Kollur)

Wheels 300,000 pcs (Silvassa)

Captive power 742 mw (Renusagar)

78 mw (Renukoot)

368 mw (Hirakud)

Copper cathodes 500,000 tpa (Dahej)

Continuous cast copper rods 120,000 tpa (Dahej)

Sulphuric acid 1,470,000 tpa (Dahej)

Phosphoric acid 180,000 tpa (Dahej)

DAP and complexes 400,000 tpa (Dahej)

Gold 26 mt (Dahej)

Silver 200 mt (Dahej)

Power 135 mw (Dahej)

Copper  

India's leading copper producer  

India's largest copper smelting and refining plant at Dahej, Gujarat, with two copper mines in Australia

 

Smelting and refining capacity 500,000 tpa, the largest single location smelter in the world

 

Captive jetty (Dahej Harbour & Infrastructure Limited, a wholly owned subsidiary)

 

ISO 9001,14001 and OSHAS 18001 certified  

Registered on London Metal Exchange as Grade A Copper Brand

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DISTRIBUTION CHANNEL

IMPORTANCE OF DISTRIBUTION CHANNEL

In any developing company there is an increasing emphasis on specialization and the division of labour as a result of this “GAP” gets developed between producer and users. The primary purpose of distributive channel is to bridge this gap by resolving spatial (geographical distance) and temporal (relating to time) discrepancies, certain essential functions need to performed.These areas;

1) Transfer of title to the goods involved.2) Physical movement from the point of production to the point of consumption.3) Storage function.4) Communication of information concerning the availability characteristics and

price of the goods in transit, inventory and on purchase.5) Marketing creates various utilities to the products. Most of these utilities are, in

fact, created by performing the function of physical distribution promptly and efficiently.

A distribution channel represents three types of flows;-

Product flow downwards from product to consumers. Cash flows upwards from consumer to producer. Marketing information flows both ways.

Choice of distribution channel is very important decision due to the following reasons;1) Distribution channel is an important element of the marketing mix of a

firm; other elements are closely interrelated with and interdependent on the channel of distribution. Therefore choice influences other marketing decision like pricing, promotion and physical distribution. A mistake in the choice of channel may affect adversely the whole marketing mix of the firms.

2) The cost involved in the use of distribution channels enter the price of the products that the ultimate consumer has to pay. Due a wrong decision regarding, channel, distribution cost may be very high and sales might be very limited. On the other hand, sound channel decisions enable the firm

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to cut down costs and maximize sales revenue. Thus, channel influences sales volume and profits.

3) A product or service is really useful to consumers only when it is available at the right time and place. The channel decision determines where and when the product will be available to ultimate consumers or users.

4) Choice of marketing channel involves long term commitment of the firm. The relation between the manufacturer and the middleman depend largly upon the choice of appropriate channels of distribution, change in the channels of very difficult and costly.

CONTRIBUTION OF CHANNEL

Make available on time. Reduce the cost of distribution. Save the distribution time. Helpful in product design & development. Flow of feedback from customer. Flow of money consumers to manufacturer.

VARIOUS TYPE OF CHANNEL LEVELS;

Generally two methods of distribution are in the practices;

1-DIRECT MARKETING CHANNEL2-INDIRECT MARKETING CHANNEL

OBJECTIVES OF THE STUDY

The primary objective of channel of distribution to bridge the gap by resolving spatial (geographical distance) and temporal (relating to time) discrepancies as to supply and demand.

Making smooth availability of product to the target market. Achievement of the best possible coverage of the target market. Ensuring that the consumer incurs the minimum extenuation in procuring the

product. Ensuring that the distribution is cost effective. Safe in quality and accuracy in quantity. Quick services.

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Ensuring that the firm is able to carry on with its manufacturing activities, confident that the channel will take care of the distribution job.

[A]- MARKET SEGMENTATION BASED ON THE PRODUCT GROUP;

On the basis of product group, Hindalco’s market may be segmented in the following user,

PRIMARY PRODUCTS’ Ingots Wire Rods Billets

R0LLED PRODUCTS;

Sheet Chequered Sheet Roofing Sheet Coil Hot Rolling Plates Circles

EXTRUDED PRODUCTS General solid Section Tubings Structure Of Architecture Of Mouldings

FOIL

Cable Wrap Stock Light Gauge Foil Bare And Coated Fine Stock Collapsible Insulation Duets

ALLOY WHEELS [“AURA”] 12” To 18 Diameters

[B]- MARKET SEGMENTATION ON THE BASIS OF PRODUCT WISE KEE CONSUMER;

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PRIMARY PRODUCTS; [CONSUMERS] Value added aluminium. Sheet producer industries. Foil producer industries. Electrical equipments. Automobile industries. Ferro alloy. Smelter pot lining

ROLLED PRODUCTS; [CONSUMERS] Foil and packing industries (box, cop & sustainer). Electrical industries (bulbs, tube lights, fan blade ect). Transportation industries. Buildings & Construction sector-roofing flooring etc. Transportation sectors. Consumers durable flooring and roofing General Engineering pilper-proof bottle cops, pressure cookers, nonstick

cookers.

EXTRUDED PRODUCTS; [CONSUMERS] Automobile industries Building and construction sector Mines and defence sector Transportation sector Electrical sector Architectural sectors Furniture sector Households consumer durable

FOIL; [CONSUMERS] Packing sector (Printed multi laminated) Pharmaceuticals Dairy products Processed food Personal care products Cigarettes Con-Factionary Box roping Air conditioner Automobile radiator Collapsible insulation duets

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ALLOY WHEELS; [CONSUMERS] Automobile sectors Maruti Suzuki Tata motors FLAT India Hindustan motors Telco Ford India Hyundai India GM India etc

ADVANTAGE OF THE PRODUCT ADVANTAGE;

Physically, chemically and mechanically aluminium is a metal like steel, brass, copper, zinc, lead or titanium. If it can be metal cost, formed and machined much like these metals and it conducts electric current. In fact often the same equipment and fabrication method are used as for steel.

LIGHT WEIGHT;Aluminium is a very light metal with a specific weight of 2.7g/cm, about a third that of steel. For example, the use of aluminium in vehicles reduces dead-weight and energy consumption while increasing load capacity. Its strength can be adopted to the application required by modifying the composition of its alloys.

CORROSION RESISTANCE;Aluminium naturally generates a protective oxide coating and is highly corrosion resistance. Different types of surface treatment such as anodizing, painting, or lacquering can further improve this property. It is particularly useful for application where protection and conservation are required.

ELECTRICAL & THERMAL CONDUCTIVITY;Aluminium is an excellent heat and electricity conductor and in relation to its weight is almost twice as good as conductor as copper. This has made aluminium most commonly used material in major power transmission lines.

REFLECTIVITY;Aluminium is good reflector of visible light as well as heat that together with its low weight, makes its an ideal material for reflectors in. For example, light fittings or resources blankets.

DUCTILITY;

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Aluminium is ductile and has a low melting point and density. In a molten condition it can be processed a number of ways. Its ductility allows products of aluminium to be basically formed close to the end of this product design.

IMPERMEABLE AND ODOURLESS;Aluminium foil, even when it is rolled to only 0.007mm thickness, Is steel completely impermeable and let’s neither light aroma nor taste substances out. More over, the metal it self is non-toxic and releases no aroma taste substances which make it ideal for packaging sensitive products such as food or pharmaceuticals.

RECYCLABILITY;

Aluminium is 100% recyclable with no down grindings of its qualities. The re-melting of aluminium requires little energy, only about 5% of energy required to produce the primary metal initially is related in the recycling process.

ALLUMINIUM PROPERTIESThe major advantages of using aluminium are tide directly to its remarkable properties. Some of these properties are outlines in the following sections.

STRENGTH TO WEIGHT RATIO;Aluminium has a density around one third that of steel and is used advantageously in application where high strength and low weight are required. This include vehicles where low mass result in greater lode capacity reduction fuel consumption.

CORROSION RESISTANCE;When the surface of aluminum metal is exposed to air, a protective oxide coating forms almost instantaneously. This oxide layer is corrosion, resistant and can be further enhanced with surface treatment such as anodizing.

ELECTRICAL & THERMAL CONDUCTIVITY;Aluminium is an excellent conductor of both heat & electricity. The great advantage of aluminium is that by weight, the conductivity of aluminium is around twice that of copper. This means that aluminium is now the most commonly used material in large power transmission lines including domestic wiring.

WEIGHT CONSIDERATION;It means that a large property of overhead, high voltage power lines now used aluminium rather than copper.

LIGHT AND HEAT REFLECTIVITY;Aluminium is a good reflector of both visible light & heat marketing, it an ideal material for light fitting, thermal rescue blankets and architectural insulation

TOXICITY;Aluminium is not only non-toxic but also does not release any odors or taint

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Product with which it is in contact. This makes aluminium suitable for use in packing for sensitive products such as food or pharmaceutical where aluminium foil is used.

RECYCLABILITY;The recyclability of aluminium is unparalleled. When recycled, there is no digression in properties when recycled aluminium is compared to virgin aluminium. Furthermore, recycling of aluminium only required around 5% of the input energy required to product virgin aluminium metal.

APPLICATION OF ALUMINIUM;

1- IN CONSUMER DURABLES; Major applications are also in following fields;

Cookers Refrigerators Freezers Vacuum cleaners Washing machines Ice tray & grid Paddles Stove tops Water filters Furniture Hangers Letters plates Solar channel Watch case etc.

2- IN ELECTRICAL INDUSTRY; Electrical components Accessories Motor body Cable core Telephone parts Transmission tower.

3-IN CONSTRUCTION INDUSTRIES;

Solar panels Cladding roofing Window door & general application

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Architectural hardware furniture Grills Ventilation blind Foil insulating Capping strip rain water guttering Shower boxes Mosquito nets Casemate window Ceiling system Roller shutter

4-IN PACKING INDUSTRIES;Major applications in the field are as follows;

Pharmaceutical packing Cigarettes foil Tea industries Tagged lids Aluminium cans for milk Dairy product packing Multiply laminates Electrical power application Decorative laminates Collapsible tube Powder and chemicals Colors Aseptic packing Beverage cans Flexible food packing Semi-rigid containers

5- IN RAILWAYS;

Major applications are as following; Wagons Doors Windows Decorative frames, etc

e.g. METRO TRAIN in India.

6- IN TRANSPORT INDUSTRY;

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Aluminium alloys are used in the construction of almost all type of transport equipment

Commercial aircraft Passenger cars Bus and bus shelter Railway Bicycles & bikes Trucks Light motor vehicles.

PROBLEMS & LIMITATION

The company is situated so for from the Airport.

Causes of huge demand the company has to do work 24 hours.

There is no facility of shipping because it is situated at hill.

Transformation can be stooped the working activity of company.

The raw materials are available in other states .coal, bauxite

CONCLUSION

The above study makes it clear that HINDALCO has a well-established market for its products. The company is making a reaped progress in the various spheres of its business activities besides the company adopts a favorable attitude towards safety environments and quality consideration. The company has also been undertaking various community developments programs. In the nearby located areas. It has been a learning a exercise to complete this project, working on this project I found the practical knowledge about the industrial organization. It has been an enjoyable and fruitful experience to me. I certainly gained a lot of practical knowledge while on training. The study is intended to be concluded with the help “Strength, Weakness, Opportunity, Threats” Analysis of Distribution Channel of the Hindalco Industries Limited which will presents a summarized view of the whole study.

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In the research on sales and distribution management of Hindalco. I have a detailed study of marketing mix and the sourcing strategies of hindalco. For that we used the different sources of data collection like magazines employee of the organization ,and Inhouse publication etc. In our research we found that hindalco is one of the major company of manufacturing sector and aluminum industry without spending much amount on advertisement. They basically concentrate on primary metal, rolled products, extrusions, alloy wheels and aluminum foils

They are growing organically as well as inorganically. Hindalco is market leader of aluminum industry.We also found that they a;so take proper care of their customer and provide better facilities to those customer who are loyal to them.

In short we can say that Hindalco is one of the biggest aluminum manufacturing company, from the house of Aditya Birla group

BIBLIOGRAPHY

MAGIZINES; Impex time Aluminium times Aluminium now Aluminium international today Annual report (07-08), HIL Induction guide

INTERNET; Hindalco.com Aditya Birla.com

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