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STEEL AUTHORITY OF INDIA LTD.ANALYSIS OF INVESTMENT DECISIONS AT SAIL

Presented By:-Mayank Jain

FC10143

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CONTENT

Briefaboutthecompany

History

Vision

CREDO

SocialPolicies

Valuesoftheorganisation

Leadershipprofile

Products IndianSteelIndustry

CompetitivePosition

SWOTanalysis

BusinessStrategy.

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AboutCompany

SAIL is the largest Steel Producer of India.

SAIL has capacity of over 14 million tonne of Hot Metal and wideproduct range.

The Company owns & operates Five Integrated Steel Plants at

BhilaiSteelPlant(BSP)inChhattisgarh

DurgapurSteelPlant(DSP)inWestBengal

RourkelaSteelPlant(RSP)inOrissa

BokaroSteelPlant(BSL)inJharkhand

IISCOSteelPlant(ISP)inWestBengal

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HISTORY

SAIL has its origin in Hindustan Steel Private Limited whichwas set up on January 19, 1954.

In order to manage inputs and outputs under one umbrella

the concept of creating a holding company was mooted.This led to the formation of Steel Authority of India Limited

on January 24, 1973 with an authorized capital of Rs. 2000.

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Vision

To be a respected world class corporationand the leader in Indian steel business inquality, productivity, profitability andcustomer satisfaction.

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CREDOWe build lasting relationships with customersbased on trust and mutual benefit.We uphold highest ethical standards in conduct ofour business.We create and nurture a culture that supportsflexibility, learning and is proactive to change.We chart a challenging career for employees withopportunities for advancement and rewards.We value the opportunity and responsibility tomake a meaningful difference in people's lives.

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SOCIALPOLICIES

Corporate Social ResponsibilityPolicy

Sail Mediclaim Scheme For RetiredEmployees

Inter Plant Standardization in SteelIndustry (IPSS)

Safety Policy

Quality Policy

Corporate Environmental Policy

Human Resource Policy

HIV/AIDS Policy

Information Technology SecurityPolicy

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ValuesofSAIL

Consistentwithcompanysvision,goalsandstrategies,SAILadoptedthefollowingfour

valuesin1995:

1.Customersatisfaction

2.Concernforpeople

3.Consistent

profitability

4.Commitment

toexcellence

SAIL

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Shri C S Verma

Shri SMachendranat

han

Shri Soiles

Bhattacharya

ProfDeepakNayyar

Shri AK

Goswami

Prof. SubrataChaudhuri

Shri BBSingh

Dr. JagdishKhattar

Shri UpendraPrasad Singh

Shri ShumanMukherjee

Shri PCJha

Shri PKSengupta

CommercialPersonal

FINANCE

LeadershipProfile

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PRODUCTS

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Indian Steel Industry TheSteelindustryisdominatedbygovernmentownedenterprisesorcash-richprivateorganizations.

Itisgreatlyaffectedbythechangingpoliticalandeconomic

environment

ThemajorneedforsteelcomesfromtheAutomobileindustry,ConstructionIndustry,InfrastructureIndustry,OilandGasIndustry,aswellasContainerIndustry.

IndiaisamongstthecheapestproducersofhotmetalintheWorld.

Indiahasalsoemergedasoneofthelargestproducersof

SpongeIron.

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Indian Steel Industry The Indian steel industry is organized in threecategories:

Main Producers

having integrated steel making facilities andutilizing iron ore and coal/gas for production of steel.

Other Major Producers have similar steel making facilities likes ofESSAR, ISPAT and JVSL

The Secondary Producers are dispersed and consist of:

Backward linkage

energy optimizing furnaces

Forward linkage

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Competitive Position InIndustry Potential entrants: Steel production entails huge capital investments in infrastructure

and sourcing and handling of raw materials.

Industry Competitors: The demand is high. Also, the number of players is limited.

Bargaining power of suppliers: Since there is limited number of suppliers of blast furnacesin the world, SAILs extensive expansion plans shall give them a chance to exercise theirimportance.

Bargaining power of buyers: because of the lowest costs of production and due to highgrowth in demand; the buyers do not have much bargaining power.

Threat of Substitutes: Although usage of aluminium has risen continuously in theautomobile and consumer durables sectors, it still does not pose any significant threat to

steel as the latter cannot be replaced completely and the cost differential is also very high.

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STRENGTHS

StaffingisabigstrengthforSAIL

Customerbaseisanothermajorasitofferssteelatsubsidized.

AnotherstrengthforSAILisitsMarketpositionwhichisonaverysuccessfullevel.

FinancialResourcesalsoactsasastrengthasitcanuseGovt.fundsforventures.

SalesChannelsalsoisastrengthasitusesallpossiblechannelsforpromotionandSales.

Productiscoreinnatureandrelatedtoalmostalldevelopmentandinfrastructureactivities.

Profitabilityisanotherstrength.

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WEAKNESSStaffposses

asaweaknessinacertainwayasSAIL

beingaGovt.venture.

Anotherweaknessisthathigher

profitmarginsarepossiblebutnot

allowedsince

beingaGovtventure.

Competitive

Vulnerabilityisanother.

Anotherweaknessisproductionofasinglevertical

(Steel)andno

diversification.

AlsoamajorWeaknessiscompletely

answerabletotheCentralGovt.andhenceexposedto

corruptionandmis-management

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OPPORTUNITIESSAILhascertainopportunitiesasitisaffiliatedtotheCentralGovt.ofIndiaandhenceexpansionand

growthispossible

SAILalsocanadoptglobalizationwitheaseusingGovt.support

SAILbeingfinanciallysoundcanundertakemergerandacquisitionprojectswithweakercounterparts.

Itcanalsoinvolveinproductionofforwardintegration

productsandby-productsapartfromitscoreproduct(Steel)withthehelpofitshealthybrandimage

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THREATSChangesinGovt.PoliciesandEconomytrendwhichcanhaveadirectimpactonthefunctioningofSAIL.

Emergingandexistingprivatesectorcompetitorswhocanstealmarketshare.

Alsolateimplementationoftechnologyandmodernmachineryas

comparedtocounterpartscanposeapotentialthreat.

Apartfromtheabovemajorthreats,laborturnovercanalsocauseproblemsduetoexistenceofhigherpayingjobswithbetterbenefitsinthesector.

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Presented By:-Mayank Jain (FC10143)