A STUDY ON THE PRICING AND

SALES STRATEGY OF SECONDARY

AND BY-PRODUCTS AT SAIL
(BOKARO)

Submitted By:
Ravi Raj

ROLE OF MARKETING DEPARTMENT

MARKETING DEPARTMENT OF BOKARO STEEL PLANT

Marketing Department is entrusted with the

responsibilities to sell BSLs Secondary

Products, By-Products/Waste Products, and
Idle Assets etc.
Sales procedures are covered by the
guidelines given by SAIL Corporate office
DELHI, and is given by CMMG (CORPORATE
MATERIAL MANAGEMENT GROUP), the
objective of which is To sell the materials
in a fair and transparent manner to achieve
maximum possible revenue to the
company

Category of Secondary
Products
REROLLABLE/IR
ON AND STEEL
SCRAP/BFG
MS THICLE
PLATE
SLAG

CUTTING (25-40 MM)

MIXED W.FR.
SPILLED HOT METAL
(10 MT AND BELOW)
SMS ARISINGS.
LIQUID NITROGEN.
FINE IRON CHIPS
FROM IMP (FE-70%
APP).
FERROUS SIELPHATE
LOOSE.
BE GRNAULATED
SLAG(BOTH BY FIXED
PRICE AND TENDER).
LIQUID ARGON.
PIG TRON.

COAL
CHEMICALS
AND BY
PRODUCT

MG BENZENE
NG TOLUENE
LS NAPTHA
AMMONIUM
SULPHATE
CRUDE BENZOL
SULPHURIC ACID
HP NAPHTHALENE
ANTHRANCENE OIL
EXTRA HARD PITCH
HARD MEDIUM
PITCH SOLID
STATE

IDLE
ASSETS
/SURPLUS
ITEMS
CAPITAL IDLE

ASSETS
ROLLS
SURPLUS CARBON
BLOCK
STORES ITEM

NECESSITY OF SELLING THE ''SECONDARY

PRODUCTS
The net sales realization from all the Secondary

products, By-Products and co-products of BSL is

around Rs.600 Crores which is quite more than
money the big industries.
By selling it to the different Mills/traders/Processors
the plant earn around Rs.4000 per tones of the
direct profit than by re-producing it to the main
product.
By selling secondary Products to the Local market
new industries are developed for re-rolling the
Secondary materials to make finished products. It
has also increased the small-scale industries and
employment opportunities


POLICIES OF MARKETING
Positioning the product a value based place in customer

mind.
Finalize annual sales plan and quantity, monthly, weekly,
and daily rolling programme .
Optimizing the product-mix by proper utilization of
available stocks.
Receiving Enquiries and complaints, cancellation of orders
etc.
Coordinating the works of mills and traffic department so
as to maximize dispatches.
Periodical market surveys of products to analyze the
market position.
Implementation of suggestions received from the
customers feedback.
Ensure customer satisfaction by meeting customers
regularly; provide redress to their problems and fulfillment

Selling of Secondary & By-Product

This involves a direct marketing process in

consultation with the official of the market

development and customer service
department work as group for the sale of
these items. DifferentE-modes of selling are
auctio
used for these products
n

Inter
Plant
Transf
er

Fixed
Price
Sale
Inter
Plant
Transf
er

Procedure for Online Forward Auction

Lot Formation- Lot is formed in based of type /

class / category / grade wise. Each lot shall has

identification mark and a specific lot number
indicating the location.
Inspection of Material ( for material
available on ground ) - The materials offered
for sale are on AS IS WHERE IS (AIWIB) and
NO COMPLAINT basis
Lot
valueDeposit
in
EMD
Earnest
Money
( EMD
)
Rupees
Lot(s) having value @ 2 % of lot value.
up to 25 Lakhs
Rupees.
For lot(s) having
Rs. 50,000 /-.
value greater than

Continued
Conduct of Forward Auction by M-Junction.
Award at the Auction - only H1 bidder ( normally

the bidder who quotes the highest price ) is awarded

the item being auctioned .
Acceptance of Offer / Sale Order / Offer Letter
Security Deposit and Payment towards
material value-The successful bidder shall be
required to furnish security deposit ( if applicable )
and the amount against value of materials including
taxes & duties applicable as per details indicated in
the Acceptance of offer / Sale order / Offer letter .
Release Order / Delivery Order

Price Fixation
Reserve Price Fixation Committee (RPFC) for Sale

through Electronic Auction / Open Tender

A Reserve Price Fixation Committee (RPFC) constituted
with the approval of the Competent Authority for deciding
the Reserve Price.
The RPFC may consist of representatives from
Marketing Department / Materials Management
/Department, Finance, Dealing Department /Operations &
Chief Executives Nominee, if any.
RPFC may be headed by an executive not below the rank
of E-7.
RPFC shall recommend the Reserve Price (RP) for each
category of material, which shall be forwarded in a sealed
cover to the head of Materials Management Department /
Marketing Department and kept confidential

Disposal of Idle Assets

Idle assets are those, which are no longer required of

intended purpose and/or retired from active use. These may

be categorized as assets becoming idle
- due to normal/premature replacement.
- Being abandoned after installation &
commissioning.
- Being found in-operative/uneconomical after
procurement.
The major reasons for items becoming idle could be
either / or a combination of the following:
1. Technological up gradations/modernization of
plants/processes.
2. Inherent design defect.
3. Non-availability of spares and/or drawings and /or inputs
(Raw materials / consumables/stores etc.)
4. Change in market scenario affecting marketability of
product.

Procedure for Disposal of Idle Assets

Committee for
Identification, declarations,
processing for write- off and
management of
Idle Assets(CMIA) disposal of the Idle Assets .
Determination of
Written Down
Value (WDV)

Cost of Assets capitalized in the

books of Accounts less
accumulated depreciation

Write-off losses

Chief Executives and Directors

are empowered to write- off
losses .

Initiate action for

for disposal of Idle Assets.
identifying the Auction
Same procedures are followed i.e
Prospective
lot creation,RPFC,etc.
buyer

Sale through Fixed Price

Mixed
Coke

BFG

Sale of Mixed Coke (3100 MT) through

auction
Revenue generated Rs 2.76 Cr.
Sale of Mixed Coke at Fixed Price.

Initiation of Sale of BFG Slag at Fixed Price

M/s ACC Ltd is leading customer apart
from other prospective customers willing
Slag to take at Fixed Price
Revenue Generated

E- Auction Sale(Yearly
Comparison)
e auction-Recommended for sale (Base Price)
50000
45000

44136

45502
39220

40000
33628

Val.35000
in Rs. Lacs

40037

38532
32905

30825

30000
25000
20000
15000
10000
5000
0

43890

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

Lacs)
2013-14

2014-15
930

613
563

420

259

224

88
35
APR

315

282

MAY

48

79

JUN

114
78

JUL

147 129

SEP

OCT

168
96

62

56
AUG

146

NOV

DEC

55
JAN

FEB
0

MAR
0

BFG Slag ( in Rs Lacs)

1200

973

1000

800

600

400

322340

379
310

294297

250

298
275

306
251

301288

423

313
243

261

246

200

369

406

142

APRIL

MAY

JUNE

JULY

AUG

SEPT

2013-14

OCT

2014-15

NOV

DEC

JAN

FEB0

MAR
0

Total Sale (Dispatch Value)

Total Sale (Despatch Value)
7000
6246

6000

6124

6098

5821
5521

5000
Val. in Rs. Lacs

5124

5064
4601

4416

4229

4361

4247

4734
4439
4008

3957

4000

3495
3197

3554

3138

201314

3000

2000

1000
0

0
APRIL

MAY

3700

JUNE

JULY

AUG

SEPT

OCT

NOV

DEC

3839

JAN

FEB

MAR

ITEMS SECONDA IRON &

RY
STEEL
STEE
MELTING

SCRAP

DESPATCH INVOICE VALUE

BY
MISC&
BFG SLAGPIG IRON PRODUCT OTHERS

VALU
VALU
VALU
VALU
PERIOD E

'13-'1 '14- '13-'1

'13-'1 '14- '13-'1 '144
15
4
'14-15 4
15
4
15
APRIL
3363 1953 333
292 322 340

MAY
2643 4312 306
395 250 310 751
JUNE
1255 2231 250
325 294 297 752

310 1198

142

H2

962

3144 1705 1928 1113

2144 2415 5638 1657
1
5
6
4 2645 528

1830 1060
6
3 2559 1418 2793

VALU
VALU
VALU
VALU
U &S TS
E

ITEMS)
'13-'1 '14- '13-'1
'13-'1 '14- '13-'1 '14- '13-'1 '144
15
4
'14-15 4
15
4
15
4
15
183 161 1620 451 5821 3197 3835 3818
35 259
217 343 434 886 4601 6246 1183 2818
88 282
272 297 315 550 3138 3700 1558 1915
48
79
1355 1314
672 801 2369 1888
9
4 6576 8550 171 619
300 428 296 368 3495 3957 2651 2717
78 114
507 447 424 447 3554 4416 3049 2756
56 147
465 277 267 587 5064 4229 3891 3839 129 420
1211 1260
1273 1152 987 1402
2
3 9591 9312 263 681

2567 2574 1616 1786

1945 1953 3356 3290
2
6
7
2 434 1300
368 756 1493 380 5521 4361 3523 2839 930
62
393 625 1255 400 6098 4247 3553 2412 146 315
218 645 399 631 4734 4439 3649 3353 168
96
1635 1304 1072
979 2026 3148 1411
3
7
5 8604 1244 473
444 389 389 246 3839 4008 267 2530 224
55
406
424
5124
6182
613
315
1677
6124
2112
563
1508
1165 389 2490 246
8 4008 8561 2530 1401
55

1ST QTR 7261 8495 889 1012 866 948 1503

JULY
2333 2469 269
417 298 275

AUG
1994 3016 322
256 306 251

SEPT
3444 2774 586
302 301 288

2ND
QTR
7771 8259 1177
975 905.4 815

1503 1675
H1
2
5 2065 1986 1771 1763 1503
OCT
2892 2541 525
372 243 313

NOV
2995 2597 482
364 973 261

DEC
3348 2545 390
372 379 246

3RD
QTR
9236 7683 1396 1107 1595 820

JAN
2125 2921 513
310 369 142

FEB
3579
308
406

MAR
3366
342
423

4TH QTR 9070 2921 1163

AUCTION SALE
VALUE
TOT
EEAL
AUCTION AUCTION
DESPATC (EXCEPT (IDLE
H
IA GR)
ASSET &

NSR (Rs./PMT)
80000
70000

71940

72780

60000
57183
50000
Rs./pmt

40000

48843

Sec.Steel
Crude Benzol
H P Naphthalene

42087

39715

30000 31666

48576

52260

35985
30222

30834

30873

27738
27041

20000
10000
0

2014-15 2013-14 2012-13 2011-12 2010-11


Marketing Strategies of BSL

Customer Satisfaction
BSL adopts following practices for customer satisfaction.
Procedure / process adapted to access current / future
expectation of customers.

To understand customer needs seminars and workshops

are also organized by BSL.
MARKET DEVELOPMENT

STOCK REDUCTION - Giving facilities like door delivery,

road dispatches, credits facility and rounds the clock
stockyard operation.

PRICE FIXATION Reserve price fixation must be done

according to current market scenario

DESPATICH- Dispatch by different modes(Road/ Rail)

Continued
Committed delivery.
Competitive price
Quick complaint settlement
Low price, better service and high

quality are the major concerns that

the customers looks .

Thank You