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Internship report


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Internship report

  1. 1. [TYPE THE DOCUMENT TITLE] [Pick the date] SUMMER TRAINING REPORT ONINCREASE IN SALE IN THE UNORGANISED SECTOR IN THE FAN BLADE INDUSTRY For HINDALCO INDUSTRIES LIMITED Under the supervision Of Mr. Rajib Dasgupta (FRP-EAST) Duration- 2nd May-30th June,2011 Sarathi Bhattacharya New Delhi Institute Of Management PGDM 2010-2012 1
  2. 2. [TYPE THE DOCUMENT TITLE] [Pick the date]ACKNOWLEDGEMENTAt the outset I would like to place on record my gratitude to all concernedrespectable executives of Hindalco Inds. Ltd., Kolkata for giving me thisopportunity of Internship which has been a pure learning experience and hasenlightened my knowledge and skills in the industry.I would also like to express my gratitude towards the New Delhi Institute OfMnagement for giving me the opportunity to undergo two months internship atHindalco Industries Ltd., Kolkata.I am extremely thankful to Mr. Rajib Dasgupta, Territory Manager, (FRP-EAST) , who has been my industry mentor and has helped me immensely torelate theoretical concepts to actual business scenario and has guided methroughout the internship period. I am indeed greatly indebted to him andeverybody concerned at Hindalco who have provided me with valuableguidance that contributed to the successful completion of this marketingproject. Sarathi Bhattacharya PGDM(2010-2012) New Delhi Institute Of Management 2
  3. 3. [TYPE THE DOCUMENT TITLE] [Pick the date]CONTENTSSL. NO. DESCRIPTIONPAGE NO.1 Introduction to the project1.1 Company Background1.2 Overview of the industry1.3 Major players in Indian Aluminium Industry1.4 Fan blade industry1.5 Aluminium consumption in fan blade1.6 Fan blade industry in eastern India1.7 Sale in unorganized sector2 Job assigned/Title2.1 Key responsibilities2.2 Stages of the project2.3 Brief description of the problem3 Objective of study4.1 Methodology4.2 Questionnaire4.3 Project constraints5 Collection and analysis of data5.1 Chapter summary5.2 Data analysis5.3 Observations5.4 Market analysis6 Findings7 Swot analysis8 Recommendations9 Conclusion10 Bibliography 3
  4. 4. [TYPE THE DOCUMENT TITLE] [Pick the date]1. Introduction to the project1.1 Company BackgroundBrief Insight of Hindalco Inds.:An Industry leader in aluminium and copper, Hindalco Industries Limited, themetals flagship company of the Aditya Birla Group is the world‟s largestaluminium rolling company and one of the biggest producers of primaryaluminium in Asia. Its copper smelter is the world‟s largrst custom smelterat asingle location.Established in 1958, it commissioned aluminium facility atRenukoot in eastern Uttar pradesh, India in 1962. Acquisitions and mergers,with Indal, Birla Copper and the Nifty and Mt. Gordon copper mines inAustralia, strengthened their position .The acquisition of Novelis Inc. in 2007positioned them among the top five aluminium majors worldwide and thelargest vertically integrated aluminium company in India. Today, they are ametals powerhouse with high end rolling capabilities and a global footprint in12 countries. Their consolidated turnover of USD 13 billion ( 60,000 crores )placed them in the Fortune 500 league.Hindalco is one of the leading producers of aluminum and copper. Theiraluminum units across the globe encompass the entire gamut of operations,from bauxite mining, alumina refining and aluminium smelting to downstreamrolling, extrusions, foils, along with captive power plants and coal mines.Their units are ISO 9001:2000, ISO 14001:2004 and OHSAS 18001 certified.Several units have gone a step further with an intrgrated management system(IMS), combining ISO9001, ISO 14001, and OHSAS 18001 into one businessexcellence model. They have been accorded the Star Trading House status inIndia. Hindalco‟s aluminium metal is accepted for delivery under the HighGrade Aluminium Contract on the London Metal Exchange (LME ). Theircopper quality standardsare also internationally recognised and registered on theLMEwith Grade A accrediation. 4
  5. 5. [TYPE THE DOCUMENT TITLE] [Pick the date]AluminiumHindalco‟s major products include standard and speciality grade aluminas andhydrates, aluminium ingots, billets, wire rods flat rolled products, extrusionsand foil.The integrated facility at Renukoot houses an alumina refinery and analuminium smelter, along with facilities for the production of semi-fabricatedproducts, namely, redraw rods, flat rolled products and extrusions. The plant isbacked by a co-generation power unit and a 742 MW captive power plant atRenusagar to ensure the continuous supply of power for smelter and otheroperations. A strong presence across the value chain and synergies between operations has given us a dominant share in the value added products market. As a step towards expanding the market for value added products and services, they have launched various brands inrecent years – Everlast Roofing Sheets, Fresh wrap kitchen foil and freshpacksemi-rigid containers.Hindalco is Asias largest integrated primary producer of aluminium and amongthe most cost-efficient producers globally. Their aluminium units across Indiaencompass the entire gamut of operations, from bauxite mining, aluminarefining, aluminium smelting to downstream rolling, extrusions and recycling.In India, they enjoy a leadership position in aluminium and downstreamproducts. Their product range includes rolled products, extrusions, foils,primary aluminium ingots, billets, wire rods and aluminium slabs.Hindalco‟s integrated complex at Renukoot, in Uttar Pradesh, India, houses analumina refinery, an aluminium smelter and facilities for the production ofsemi-fabricated products. Power is sourced from their Renusagar power plant,located about 45 km from Renukoot. 5
  6. 6. [TYPE THE DOCUMENT TITLE] [Pick the date] The captive power plant located at Renusagar, Uttar Pradesh, with 10 power-generating units, has a current generation capacity of 742 MW. Excellent operational standards have ensured a consistent plant load factor of over 90 per cent. The integrated complex at Renukootalso houses a co-generation plant with a capacity of 37.5 MW. A new co-generation plant with a capacity of 41 MW has just been commissioned to meetthe requirements of the enhanced post-expansion capacities.Other facilities include an aluminium smelter at Hirakud (Odisha) with acaptive power plant and coal mine, alumina refineries at Muri (Jharkhand), andBelgaum (Karnataka), and rolling mills at Belur (West Bengal), and Taloja,Mouda (Maharashtra), foil rolling at Kalwa (Maharashtra) and Silvassa (UnionTerritory of Dadra and Nagar Haveli) and an extrusions plant at Alupuram(Kerala).As a step towards building the market for value-added products and services,they have launched several brands in recent years, namely, Freshwrappaluminium foil, Everlast aluminium roofing sheets, Permashield aluminiumwaterproofing membrane sheeting, and Al Planet, an exhibition showcasingaluminium products for the construction industry.Primary Aluminium Hindalco is a major player in the primary aluminiummarket. Their product range includes:Ingots which Hindalco produces high-purity ingots through smelting. and Alloyingots of various grades are also produced and mainly used for the productionof castings in the auto industry and in electrical applications. Both theseproducts are re-melted and further processed into a large number of products fordownstream applications.Wire rods:Hindalco manufactures wire rods in acontinuous casting and rollingprocess. 6
  7. 7. [TYPE THE DOCUMENT TITLE] [Pick the date]Electrical conductor (EC) wire rods are used for the production of cables andACSR and AAC conductors. Alloy wire rods are used to produce AAACconductors.Billets:Hindalcos aluminium billets are produced by a state-of-the-art Wagstaffcasting process using Airslip technology.These are top-quality billets with a smooth finish. They are used mainly toproduce extrusions and forgings. 7
  8. 8. [TYPE THE DOCUMENT TITLE] [Pick the date]CopperBirla Copper, Hindalco‟s copper unit, is located at Dahej in Gujarat, India.Theunit has the unique distinction of being the largest single location coppersmelter in the world. The smelter uses state of the art technology and has acapacity of 500,000tpa.Birla Copper also produces precious metals, fertilisers and sulphuric andphosphoric acid. The unit has captive power plants for continuous powergeneration and a captive jetty to facilitate logistics and transportation.Birla Copper upholds its longstanding reputation for quality copper cathodesand continuous cast copper rods by assuring its management processes meet thehighest standards. It has aquired certification such as ISO-9001:2000(QualityManagementSystems), ISO-14001:2004(Environmental Management System)and OHSAS-18001:2007 ( Occupational Health & Safety Management Systems). 8
  9. 9. [TYPE THE DOCUMENT TITLE] [Pick the date]Production Capacity of ALUMINIUM and its Location (2011):TABLE – IVNo. Key Products Location Capacity(TPA) Renukoot , UP 700000 Belgaum1 Alumina 350000 ,Karnataka 180000 Muri , Jharkhand 1230000 Renukoot , UP 3750002 Aluminium Hirakud , Orissa 143000 518000 Renukoot ( UP ) 330003 Extrusions Alupuram ( 13000 Kerala ) 46,000 Renukoot , UP Flat rolld Belur ,W B 1000004 Products Taloja , 57000 Maharashtra 50000 9
  10. 10. [TYPE THE DOCUMENT TITLE] [Pick the date] Mouda 30000 ,Maharashtra 2370005 Red raw rods Renukoot ,UP 75000 Kalwa , 6000 Maharashtra6 Foil and Packaging Silvassa , Dadra 30000 Kollur , AP 4000 40000 INDAL ( Subsidiary of7 Hindalco ) Silvassa , Dadra 300000 Pcs Wheels8 Foil rolling Kollur ,AP 4000 10
  11. 11. [TYPE THE DOCUMENT TITLE] [Pick the date] 1.2 Overview of the IndustryAluminium Industry in India :Aluminium Industry in India is one of the leading industries. It is anoligopolistic industry. It is developing fast and the advancement in itstechnologies is boosting the growth faster. The utilization of both internationaland domestic resources was significant in the rapid development of theAluminium Industry. The Indian Aluminium Industry has a bright future as itcan become one of the largest players in the global aluminium market as inindia the consumption is fairly low; therefore the industry may use the surplusproduction to cater the international need for aluminium which is used all overthe world for several applications such as aircraft manufacturing, automoblemanufacturing, utensils etc.Usage Pattern In India:Aluminium is used in various sectors, such as transportation, packaging,building/ construction and electrical industry. However the usage pattern differssignificantly for India and rest of the world. Globally, the automotive,packaging and the construction sectors are the major end users of aluminium,while in India the power sector consumes about 44 percent. Since aluminium isnaturally resistant to corrosion aluminium building materials are suitable forexcessive environments, such as swimming pool cover ( subject to chlorineattack ), or exposed structures within 50 meters of ocean ( such as port area ).Aluminium Consumption In India –Electrical 3249Automotive 1886Building & Construction 1362Packaging 1153Others 2830Figure in 00, mts. 11
  12. 12. [TYPE THE DOCUMENT TITLE] [Pick the date] Others Electrical 27% 31% Packaging Automotive 11% 18% Building And Construction 13%Fig. in ,00 MtsSource: Aluminium Commodity Report, Infoline, 2007The per capita consumption of aluminium in India continues to remainabysmally low at under 1 kg as against nearly 25 to 30 kgs in the US andEurope, 15 kgs in Japan, 10 kgs in Taiwan and 3 kgs in China. The keyconsumer industries in India are power, transportation, consumer durables,packaging and construction. Of this, power is the biggest consumer (about 44%of total) followed by infrastructure (17%) and transportation (about 10% to12%). However, internationally, the pattern of consumption is in favour oftransportation, primarily due to large-scale aluminium consumption by theaviation space.Demand for aluminium is estimated to grow at 6%-8% per annum in view of thelow per capita consumption in India. Also, demand for the metal is expected topick up as the scenario improves for user industries, like power, infrastructureand transportationIndia is worlds fifth largest aluminium producer with an aluminium productioncompetence of around 2.7 million tones, accounting almost 5% of the totalaluminium production in the world. India is also a huge reservoir of Bauxitewith a Bauxite reserve of 3 billion tones. 12
  13. 13. [TYPE THE DOCUMENT TITLE] [Pick the date]India lies at the eighth position in the list of leading primary aluminiumproducers in the world. India saw a significant growth in aluminium productionin the past five years. In 2006-07, the production target of aluminium in Indialaid by the Ministry of Mines, Government of India was 1,153 KT, which wasaugmented to 1,237 KT in the next year (2007-08). Due to the growing demandfrom the construction, electrical, automobiles and packaging industry, theproduction of aluminium also hiked up. In FY 09, the total aluminiumproduction in India was around 1.35 tonnes.After a stagnant consumption of primary aluminium in India from the end of1990s to 2002 (when the consumptions were between 500 – 600 KT), it startedrising sharply since 2002. The consumption reached at 1,080 KT in 2006. Theconsumption of aluminium in India is dominated by the industries like power,infrastructure, and transportation etc.The consumption pattern of aluminum in India is different from the globalconsumption pattern. The demand for the aluminum industry has beenpredominantly from the electrical sector. This sector is the largest end user ofaluminum in India accounting for 36 % of the total aluminum demand. Thetransport sector contributes to another 22 % of the total demand while theconsumer durable and packaging sectors consume 12 % each. The constructionsector consumes 7% of the total aluminum demand. Total domesticconsumption was about 0.55mn ton in FY98.Per capita aluminum consumption in different countriesThe consumption pattern of aluminum in India is different from the globalconsumption pattern. The demand for the aluminum industry has beenpredominantly from the electrical sector. This sector is the largest end user ofaluminum in India accounting for 36 % of the total aluminum demand. Thetransport sector contributes to another 22 % of the total demand while theconsumer durable and packaging sectors consume 12 % each. The constructionsector consumes 7% of the total aluminum demand. Total domesticconsumption was about 0.55mn ton in FY98. 13
  14. 14. [TYPE THE DOCUMENT TITLE] [Pick the date]Per capita aluminum consumption in different countries Countries Consumption India 0.5 Japan 30.9 USA 26.9 Germany 30.1 Sweden 25.3 Switzerland 32.5 Italy 20.9 UK 11.1 France 17.7 Australia 17.9 Venezuela 8.2 Thailand 0.9 Malaysia 2.4 14
  15. 15. [TYPE THE DOCUMENT TITLE] [Pick the date] CONSUMPTION OF NATIONS 35 Switzerland Japan Germany 30 USA Sweden 25 Italy 20 France Australia 15 UK 10 Venezuela 5 Malaysia India Thailand 0 1 India Japan USA Germany Sweden Switzerland Italy UK France Australia Venezuela Thailand Malaysia1.3 Major players in Indian Aluminium Industry:The aluminium industry in INDIA is concentrated between 3 players :-1. Hindalco, ( AV Birla Group company)2. Bharat Aluminium Company ltd. (Balco) [Vedanta group]3. National Aluminium Company ltd. (Nalco) 15
  16. 16. [TYPE THE DOCUMENT TITLE] [Pick the date] ALUMINIUM SALES IN 2010 IN KILOTONNES SECONDARIES, 23.1, 8% IMPORTS, 46.1, 16% HINDALCO, 147.6, 49% NALCO, 14.4, 5% BALCO, 65.8, 22% HINDALCO BALCO NALCO IMPORTS SECONDARIESProducers in India: 1- Hindalco, ( AV Birla Group company)Hindalco, an AV Birla Group company, is India‟s largest aluminium producerand has the distinction of being one of the lowest cost producers of the metal inthe world. It is anintegrated player having captive bauxite mines, power unitsand high value-added output comprising semi-fabricated aluminium products.The company also has copper as its business segment, which it acquiredrecently from another group company, Indo Gulf. 2- Bharat Aluminium Company ltd. (Balco) [Vedanta group]Bharat Aluminium Co. Ltd. (BALCO) was incorporated in the year 1965 as aPublic Sector Undertaking (PSU). BALCO has several “firsts” to its credit. It isthe first public sector enterprise in the country, which started producingaluminium in 1974. In 1987-88, a captive power plant of 270 MW was added tocater to the power requirement of the unit. BALCO has been the first in theIndian Aluminium Industry to produce the Alloy Rods, which is a Feedstockfor 16
  17. 17. [TYPE THE DOCUMENT TITLE] [Pick the date]all Aluminium Alloy Conductors, very much needed for today‟s powertransmission lines. Till 2001, BALCO was a public sector enterprise owned100% by Government of India (GoI). In the year 2001, GoI divested 51% equityand management control in favour of Sterlite Industries (I) Limited. Thedevelopment of special aluminium alloys for “Intermediate Range BallisticMissile” – Agni and “Surface Missile” – Prithvi have been significantachievements of BALCO contributing to the nation‟s defence capabilities.BALCO is part of the fast moving Vedanta Resources, a London listed metalsand mining major with Aluminium, Copper and Zinc operations in UK, Indiaand Australia, and is on the threshold of a new growth phase. 3- National Aluminium Company ltd. (Nalco)Nalco, is the largest producer of alumina and second largest producer ofaluminium in the country. The company is self sufficient in the entire valuechain encompassing mining of bauxite, refining of bauxite into alumina andsmelting of alumina into aluminium. Nalco produces calcined alumina at itsrefinery and aluminium ingots, billets, strips, rolled products and wire rods at itssmelter. While the surplus calcined alumina is almost entirely exported, wirerods, billets, strips and rolled products are sold in the domestic market. Ingotsare sold in both the domestic as well as the international markets. 17
  18. 18. [TYPE THE DOCUMENT TITLE] [Pick the date]The major advantages of using Aluminium are its remarkable properties:i. Strength to weight ratio –Aluminium has a density around one-third that of steel. This property isbeneficial where high strength and low weight is required.ii. Corrosion resistance of Aluminium- When the surface of aluminiummetal is exposed to air, a protective oxide coating forms almost instantaneously.This oxide layer is corrosion resistant and can be further enhanced with surfacetreatments such as anodising.iii. Light & Heat reflectivity of Aluminium –Aluminium is a good reflector of both visible light and heat making it an idealmaterials for roof-sheet.iv. Recyclability of Aluminium –When recycled, there is no degradation of properties vis-a-vis virgin materials.Further recycling only require 5% of the input energy required to produce virginaluminium.1.4FAN BLADE INDUSTRYFans are one of the largest domestic appliances industries in India. Over anumber of years no of players have entered the Fan industry and stayed. Thenotable entrants in the past few decades are USHA (70‟s),KHAITAN & POLAR (80‟s). However 50% of the market is still unorganized. 18
  19. 19. [TYPE THE DOCUMENT TITLE] [Pick the date]Interesting features of the fan industry1-50% of the fan industry is organized.2-There is no single market leader.3-Fakes and trademark violations are rampant.4-Second hand market is very big.5-Very low product differentiation between the competing brands.6-Rural market constitutes major part of the sales.In a hot country like India fans are a relief. Over the years it has come frombeing hand held banana leaves to remote controlled multicolor designer fansfitted with exotic lights.The technology involved in the product is low. This has led to a wideproliferation of the industry by many small-scale manufacturers. Thecompetition from small-scale manufacturers is fierce and a continual worryingfactor for the organized sector.THE PRODUCT:The fan industry can be broadly classified on the bases of the products offered.The major products are:• Ceiling fans• Pedestal fans• Table fans• Wall fans• Exhaust fans• Others (include car fans, miniature ventilation fans, etc.) 19
  20. 20. [TYPE THE DOCUMENT TITLE] [Pick the date]The fan industry undergoes major seasonal and cyclical changes. A year ofgrowth is generally followedby year of slump. However the product is genericto every home the fundamentals of the industry are strong. Essentially being alow technology industry, unorganized sector occupies the same position astheorganized sector in terms of sales.There is also a major effort to corner the rural markets, which on an averagecontributes about 30-40%.1.5ALUMINIUM CONSUMPTION IN FAN BLADE 20
  21. 21. [TYPE THE DOCUMENT TITLE] [Pick the date] MARKET SIZE AND SEGMENTATIONi- Total Market Size is 13.6KT which is segmented into Organized and Unorganized sector.ii- Organized Sector contributes 60% share against 40% share of unorganized sector.iii- Industry is growing at the rate of 10% P.Aiv- Non – Decorative ceiling fans contribute to major consumption among organized sector.v- Portable fans are sub segmented into Table, Pedestal and wall mounted fan they contribute to 13% of organized sector. 21
  23. 23. [TYPE THE DOCUMENT TITLE] [Pick the date]1.6FAN BLADE INDUSTRY IN EASTERN INDIA i- Total Market Size is 2500 MT which is segmented into Organised and Unorganised sector. ii- Organised Sector contributes 30% share against 70% share of Unorganised sector. iii- Industry is growing at the rate of 9% P.A HINDALCO MARKET SHARE IN FAN INDUSTRY (EASTERN INDIA ) 23
  24. 24. [TYPE THE DOCUMENT TITLE] [Pick the date] 24
  25. 25. [TYPE THE DOCUMENT TITLE] [Pick the date] 1.7SALE IN UNORGANIZED SECTORThe unorganized sector is being a point of concern for Hindalco. Though thecurrent sales figure is not alarmingly low but it is showing a downward trend inthe increasingly competitive market.On X axis we see the year and on Y we see the sales volume of Hindalco in theunorganized sector.There is a 67 % growth towards supply of 0.91 mm -1.10mm thickness CG sheets to unorganised fan blade industries through Trade. 25
  26. 26. [TYPE THE DOCUMENT TITLE] [Pick the date]Hindalco market share in fan industryHindalco contributes 24% in the unorganized sector. 26
  27. 27. [TYPE THE DOCUMENT TITLE] [Pick the date] 2.JOB ASSIGNED/ TITLEProject title- HOW TO INCREASE SALES IN THE COMPARITIVELYLARGER UNORGANIZED SECTOR.The job assigned to me deals with the complete and detailed study of theunorganized sector.Key points being- I. Physically examining the unorganized sector clustered markets in Kolkata. II. Interviewing the people involved.III. Studying the buying behavior of the players in the unorganized sector- a) where they purchase the required fan blade sheet from b)why is the tendency to acquire comparatively lower quality C.G. sheets. c) the vendors they acquire it from if not Hindalco d) the reason behind choosing other vendors e) their rationale behind acquiring raw material from a vendor and where hindalco has to better itself for higher sales in this sector.IV. Analyzing a feasible way for Hindalco to increase its market share. 27
  28. 28. [TYPE THE DOCUMENT TITLE] [Pick the date]2.1KEY RESPONSIBILITIESIn the process of the 2 months training, I had quite a few responsibilities thatcan be enumerated as under- i) Studying the fan market with a keen eye on the fan blade sheet business in perspective. As a start I had to begin with an intensive study of the material, products and business of Hindalco from material provided by the company. I had to study the a) business trends, b) current customers, c) volume of material sold to them, d) changes in demand, e) reasons behind the aforesaid changes f) process of fan making ii) Physically visiting the customers of Hindalco. a) Managers of Orient fans, Khaitan fans and Usha fans were interviewed. b) I had to visit West Bengal Corporation, manufacturers of fan blades for Usha fans to understand the process of making of fan blades. iii) Once I had the required knowledge of the industry, I started off with the unorganized sector. iv) I had to start with the preparation of the questionnaire for the interviews. 28
  29. 29. [TYPE THE DOCUMENT TITLE] [Pick the date]v) Visiting and interviewing the unorganized sector fan makers formed the next part in the Analyzing the collected data and trying to find out the reasons of the buying behavior of the unorganized sector.vii) Trying to find a feasible solution to the problem. 29
  30. 30. [TYPE THE DOCUMENT TITLE] [Pick the date]2.2STAGES OF THE PROJECT The project can be categorized into the following stages- 1- Preparation of the questionnaire. 2- Visiting the unorganized fan markets mainly located in and around- a) Naktala area b) Hospital street, Lenin sarani up to Ganesh Chandra Avenue. 3- Interviewing the fan makers, stockists, distributors and customers. 4- Filling up of the questionnaire. 5- Finding out the price at which different manufacturers are selling fan blade sheet. 6- Trying to find out the reason behind relative difference in price. 7- Analyzing the filled up questionnaire and finding the reason behind the existing problem. 30
  31. 31. [TYPE THE DOCUMENT TITLE] [Pick the date]2.3BRIEF DESCRIPTION OF THE PROBLEMWith the vision to pro-actively shape the business of distribution andprocessing of industrial materials in India, HINDALCO IndustriesLimited aims to become the dominant industrial material managementservice provider and will create customer value by processing anddistributingindustrial products like various aluminum made end product.The focus will be on aluminium fan blade sheets. The imminent needbeing, increasing the sale in the unorganized sector.With this in mind, Hindalco wants to study the unorganized market inKolkata, identifying the potential customers and finding out their needsand if Hindalco can provide value to these small scale players in the fanindustry.A survey was conducted in order to find out the relative position ofHindalco with respect to its competitors and how it can increase itsmarket share.The project also aims to find out why Hindalco‟s competitors are in arelatively better position in the unorganized sector and how Hindalco canimprove. 31
  32. 32. [TYPE THE DOCUMENT TITLE] [Pick the date]3.OBJECTIVE OF STUDYPurpose –Primary objective-To carry out market survey to find out the relative position of Hindalcowith respect to its competitors.Secondary objective-1. To find out the relative market share of each fan blade sheetmaterials.2. To find out the preference for a brand of the customers3. Reasons for preference.4. To assess the nature of competition.5. To find what gives the customers the more value and hence findout how Hindalco can improve in those areas for higher sales.Scope-From the study we can infer that there is huge potential in theunorganized sector market and tapping the market would lead to highersales by a huge margin and consequently higher profits. 32
  33. 33. [TYPE THE DOCUMENT TITLE] [Pick the date] 4.1 METHODOLOGYThe survey was conducted in Kolkata. Data was taken from 50 respondents – a) Organized sector representatives- 8 b) Stockists- 10 c) Unorganized sector fan maker- 15 d) Customers- 17Brainstorming sessions were held so that innovative ideas could be generatedand confusion if any could be clarified. While discussing, many factors arosewhich were not possible if no discussions were held.Tools for collecting information:Detailed and descriptive questionnaire was designed to collect the requiredinformation Overall, it was an exhaustive questionnaire created to cover theextensive information of the region. (For details see appendix)Following considerations have been taken into account for the designing,preparation, refinement, administration and analysis of the researchquestionnaire-• Collection of primary data..• Carefully developed, tested and debugged before being administered to the target.• Care has been taken in framing and sequencing the sentences.METHOD OF DATA COLLECTION:The data used in the project is Primary Data collected through- a) Questionnaire b) Interviews- structured and unstructured (according to convenience). 33
  34. 34. [TYPE THE DOCUMENT TITLE] [Pick the date] 4.2 THE QUESTIONNAIREThe questionnaire that has been used in the survey is as given below. It has beenprepared under the guidance of my industry mentor. Some of the questions havebeen altered depending upon the person being asked to fill it (eg. Stockists,manufacturers etc.) I. Which are the major vendors you acquire your raw material from o Hindalco o Nalco o Balco o Others 35 30 25 20 15 No. of Customers 10 5 0 Hindalco Nalco Balco Others 34
  35. 35. [TYPE THE DOCUMENT TITLE] [Pick the date] II. What percentage of your raw material requirement do you acquire from Hindalco o 0-30 o 30-60 o 60-90 o 90 and above201816141210 Series 1 8 6 4 2 0 0-30 30-60 60-90 90 and above III. Are you satisfied with the quality of Hindalco fan blade sheets o Yes o No 35
  36. 36. [TYPE THE DOCUMENT TITLE] [Pick the date]353025201510 5 0 yes no IV. Does the quality of Hindalco justify the price o Yes o No 18.5 18 17.5 17 16.5 16 15.5 15 14.5 14 13.5 yes no 36
  37. 37. [TYPE THE DOCUMENT TITLE] [Pick the date]V. If you do, why do you prefer other companies over Hindalco o Better quality o Cheaper rate o Timely supply o Others3025201510 5 0 BETTER QUALITY CHEAPER RATE TIMELY SUPPLY OTHERS 37
  38. 38. [TYPE THE DOCUMENT TITLE] [Pick the date] VI. Rank in order of preference quality wise o Hindalco o Nalco o Balco o Others3025201510 5 0 hindalco nalco balco others 38
  39. 39. [TYPE THE DOCUMENT TITLE] [Pick the date]VII. Rank in order of preference price wise o Hindalco o Nalco o Balco o Others25201510 Series 1 5 0 hindalco nalco balco othersVIII. Where do you think Hindalco has to improve to capture a larger market share o Quality o Cost effectiveness o Others 39
  40. 40. [TYPE THE DOCUMENT TITLE] [Pick the date]30252015 Series 110 5 0 quality cost others effectiveness IX. What is the quantity of your raw material requirement per month X. What percentage of your production is dedicated towards ceiling fans XI. What is the size of aluminium sheets you acquireXII. What is the alloy of the sheets that you acquireXIII. What is the temper of sheets you acquireXIV. What percent of your raw material usage is aluminium o 0-30 o 30-60 o 60-90 o 90 and above 40
  41. 41. [TYPE THE DOCUMENT TITLE] [Pick the date] 25 20 15 Series 1 10 5 0 0-30 30-60 60-90 90 and above XV. What percent of your raw material cost is aluminium o 0-30 o 30-60 o 60-90 o 90 and above 20 15 10 Series 1 5 0 0-30 30-60 60-90 90 and above Analytical tools:The data, after being collected and tabulated for analysis, the tools that havebeen used on them are as follows: Bar Chart Pie Chart 41
  42. 42. [TYPE THE DOCUMENT TITLE] [Pick the date]4.3 PROJECT CONSTRAINTS Many times it was difficult to get an appointment with the concernedperson. The concerned person used to be very busy to give answers to all thequeries. Many people were not ready to give the required information because ofthe company policies. Many a times the data given to us is an approximate data due to whicherror in the analysis may occur. Time was inadequate.5 COLLECTION AND ANALYSIS OF INFORMATION5.1 CHAPTER SUMMARYSurvey leads were generated thorough calls and existing data. A lot of data wascollected from the internet, which includes the database of the survey also.Structured questionnaires were the way of generating primary data. Informationwas gathered from the collected data. 42
  43. 43. [TYPE THE DOCUMENT TITLE] [Pick the date]The data collected then was analyzed by filtering information and then certaincharts and tables were generated from this information so that at a glance thedesired objective can be fulfilled. The analysis and data was collected for theroofing sheet materials.5.2 DATA ANALYSIS Points to be noted- a) The option „others‟ in question I,V,VI and VII refers to the cheaply available local fan blade and C.G. sheet available in the market manufactured locally at Howrah. b) Questions numbered XI, XII and XIII have not been tested with statistical tools because of the nature of the data and it does not help in the project at hand but the information was helpful to the company and hence was collected. 5.3 OBSERVATIONS a) The reply to question I, shows that hindalco is not the leader in this sector. The most common vendors are the local manufacturers of fan blade and C.G. sheets clustered in Howrah. Even then, Nalco is doing better than Hindalco. b) The reply to question II shows that the most Hindalco supplies in this sector, falls in the 0-30% of the fan makers requirements. Opportunity in this sector is huge for Hindalco and that is what the data proves. c) Hindalco prides itself in its superior quality and the customers acknowledge that. Throughout the tenure of this survey, not a single 43
  44. 44. [TYPE THE DOCUMENT TITLE] [Pick the date] respondent was found who had complaints with the quality of material supplied by Hindalco. d) The reply to this question shows that the customers overall feel tha Hindalco is priced at more than its worth. It is the cost disadvantage that is leading to Hindalcos relatively downsliding performance in the fan blade sheet market, specially in the unorganized sector. e) The reply to the fifth question reiterates the fact that the high price of Hindalco sheets is hindering its growth in the unorganized sector since most of the customers feel that the high price is the reason they would prefer other brands. f) Reply to question VI proves Hindalcos dominance when it comes to quality of the material. It is the unified opinion of the whole of the industry that Hindalco supplies the best quality material followed by Nalco and that the locally available sheets are the worst in terms of quality. g) The seventh questions reply shows that the local sheets are performing the best in this sector because of their low cost. Hindalco is the costliest amongst its competitors and that is why it is getting the least favour in terms of price. h) Cost effectiveness is where Hindalco has to improve and this fact is coming across again through the reply to question VIII.5.4 MARKET ANALYSISAIM: Measurement of success not in absolute sales performance but in theirsales performance relative to competitors. 1- To find the estimated demand of Hindalco fan blade and C.G. sheet vis-à- vis. its competitors. 2- To find the main causes of a buyers preference of a particular brand. 3- Main decider in the buying process. 44
  45. 45. [TYPE THE DOCUMENT TITLE] [Pick the date] Based on information gathered from 35 respondents (local fan manufacturers and stockists) we get the following information- 1- C.G. sheets are more popular in the unorganized sector and rarely do any manufacturer use Fan blade sheet. Reason behind this being C.G. sheet is cheaper than Fan blade sheet by approximately Rs. 10-12 per kg. The current price of Hindalco Fan blade sheet- Rs. 170/kg. The current price of Hindalco C.G. sheet- Rs. 159/kg (VAT and Excise duty additional) 2- The unorganized sector fan makers do not go for brands generally eg. Hindalco, Nalco, Balco etc. From information received by the stockists- a) Branded aluminium sheets are rarely demanded by the local fan manufacturers. b) If demanded, Hindalco is not preferred because of comparatively higher price. c) Locally manufactured sheets are the most in demand. The difference in rate being considerable. The difference between branded sheet and local sheet is between Rs. 25-35 /kg. 6 FINDINGSFrom the survey conducted in Kolkata, respondents comprising stockists andlocal fan manufacturers, the following were found out- 1- By analyzing the preference for buying aluminium sheets, it was found that locally manufactured fan blade sheets are the most in demand followed by CG sheets. Fan blade sheets manufactured by Hindalco is the least in demand in the unorganized sector. 45
  46. 46. [TYPE THE DOCUMENT TITLE] [Pick the date] INFERENCE- Greater availability and low cost of local sheets and thereafter CG sheets help them garner majority of the customers.2- By talking at length with the manufacturers, it was observed that Hindalco sheets are out of the budget of the small scale fan manufacturers though they agree that it is the best in terms of quality. INFERENCE- Even if brands are considered, Hindalco is not finding favour because of its high price.3- The unorganized fan market is generally clustered in the same geographical are eg Naktala area and Hospital street area where all the companies do business alongside each other. Competition is intense and there is not much to choose between one brand and the other. The company delivering the cheapest fan makes the highest sale. INFERENCE- Even if a single player wants to go for Hindalco sheets, the fear of losing business to its competitors because of the increased price of the resultant product stops it from doing so.4- By analyzing the customer survey it is found that locally made sheets at Howrah enjoy the maximum market share only because of its cheap rate though the customers are unified in their opinion of its comparatively bad quality and uneven sheet size and thickness. INFERENCE- Cheap and ready availability is the only reason of the popularity of the local blade sheets.5- The unorganized sector players were largely of the opinion that a difference of Rs. 6-8/ kg can be considered but the current difference of around Rs 25-30/kg is way beyond they can afford in acquiring blade sheets. INFERENCE- It is a buyers market where these businesses are trying to make profit by the cheapest acquirement of raw material since all these companies sell the final product at almost identical price. Increasing price would lead them to lose competitive advantage. 46
  47. 47. [TYPE THE DOCUMENT TITLE] [Pick the date]6- The small scale manufacturers complain of availability of Hindalco sheets. Occasions, in which they have tried to acquire materials from Hindalco, they have not got their supplies on time. According to them the reason behind this being that their demand is comparatively far lesser in quantity than a branded fan company. INFERENCE- Supply is short in the unorganized sector leading to more sales by the local sheet manufacturers. The later being readily available.7- Comparatively bigger businesses in the unorganized sector, eg. Saha Metal Industries, Five Star Engineering Works etc. go for Hindalco because of the brand name of Hindalco and they look to expand their business. INFERENCE- Apart from these manufacturers, the businesses satisfied with the existing size of it, are not willing to spend that much.8- The small scale manufacturers going for Hindalco incur almost an additional cost of Rs. 40 in the final product. Finished fan blades made of local sheets- Rs 125- Rs. 135 Finished fan blades made with Hindalco sheets- Rs160-Rs. 170(+VAT) INFERENCE- Even when the small scale manufacturers are going for Hindalco, they opine- Hindalco, keeping in mind their supremacy in quality, should look to supply at rates of Nalco and Balco. The most they can willingly consider is a difference of Rs. 2/kg.9- Of all the stockists and small scale manufacturers interviewed, 100% go for Hindalco because of their quality of product. 40% are of the opinion that they do business with Hindalco because of the relationship they share with the company. INFERENCE- Customer satisfaction and business relations of Hindalco is top notch and when compared with its competitors, Hindalco enjoys the most popularity. 47
  48. 48. [TYPE THE DOCUMENT TITLE] [Pick the date]7 SWOT ANALYSISSWOT = Strengths, Weaknesses, Opportunities, ThreatsStrengths: characteristics of the business or team that give it an advantage overothers in the industry. 48
  49. 49. [TYPE THE DOCUMENT TITLE] [Pick the date] Weaknesses: characteristics that place the firm at a disadvantage relative toothers. Opportunities: external chances to make greater sales or profits in theenvironment.Threats: external elements in the environment that could cause trouble for thebusiness. SWOT ANALYSIS OF HINDALCO FAN BLADE SHEET STRENGTH WEAKNESS 1. HIGH QUALITY 1. HIGH PRICE. 2. HIGH BRAND VALUE 2. THE MOST EXPENSIVE 3. HINDALCO ALUMINIUM IS AMONGST ITS COMPETITORS. THE BIGGEST BRAND IN THE 3. IRREGULAR SUPPLY IN THE COUNTRY AND IN THIS UNORGANISED SECTOR. SECTOR,CONSIDERED THE 4. INFREQUENT VISITS IN THE 49
  50. 50. [TYPE THE DOCUMENT TITLE] [Pick the date] BEST AMONGST ITS UNORGANISED SECTOR MARKETS. COMPETITORS. OPPURTUNITIES THREATS 1. UNORGANISED SECTOR IS 1. PRICE OF ALUMINUM GOING HUGE.40% OF INDIAN FAN UP SO THE SHEETS EXPECTED INDUSTRY AND 70% SHARE IN TO GET COSTLIER. THE EASTERN INDIA FAN 2. CHEAPER RATES OFFERED BY INDUSTRY. COMPETITORS EATING INTO 2. HIGH BRANDNAME CAN BE HINDALCO’S SHARE. USED TO INCREASE SHARE IN 3. PERCEPTION IN THE THE INDUSTRY.ASSOCIATION UNORGANISED SECTOR IS WITH HINDALCO WOULD ADD THAT HINDALCO IS TOO LEVERAGE TO ANY BRAND. EXPENSIVE TO EVEN CONSIDER.8 RECCOMENDATIONSThe following recommendations are advisable for Hindalco to increase its salein the Unorganized sector- I. High price perception is a constraint for Hindalco in its objective. The small scale manufacturers need to be made aware of the superiority of Hindalco and the brand value associated with it and hence encouraged to expand by delivering better quality fans. 50
  51. 51. [TYPE THE DOCUMENT TITLE] [Pick the date] II. The difference in price with that of its competitors eg. Nalco, Balco, Manicksaw etc. is too prominent. Price needs to be brought down to match up to the competitors. A differenxce in price of Rs. 2-Rs.3/kg with other brands and of at lest Rs 10-Rs12/kg with locally available sheets should be targeted. III. Sales promotion techniques like gold coin distribution or cash incentives to retailers who meet certain inventory figures and sales target in the Unorganized sector. IV. Investment in Research and development on ways to produce aluminium in cheaper rates. The initial investment would be high but the opportunities in the Unorganized sector can be tapped since price is the biggest hindrance in Hindalcos way in this sector. V. More advertisements are required to counter the high price reputation of Hindalco aluminium and the dent free, rust free nature should be effectively highlighted. Advertisements in trade journals, trade fairs and industrial meets should be heavy. The quality should be laid stress upon. VI. Frequent visits to unorganized sector markets eg. Naktala and Lenin Sarani to educate customers about Hindalco Fan blade and C.G. sheets and its superiority over other brands.VII. Increase in production and supply of C.G. sheets since it will stand a better chance in the unorganized sector because of its cheaper rate.VIII. Concentration on production and supply of 0.91mm- 1.10 mm thickness CG sheets since these are the most sought after in the unorganized sector. 51
  52. 52. [TYPE THE DOCUMENT TITLE] [Pick the date] IX. Identifying potential customers in the unorganized sector since there are enthusiastic manufacturers. They should be encouraged to use Hindalco sheets in place of local poor quality blade sheets. X. Extending support to stockists. There have been stockists saying that some sort of credit period offered by Hindalco would encourage them to keep more stocks of Hindalco sheets. There are stockists who extend a credit period of around 15 days to local manufacturers . A few of such stockists are- a) Radhika metal b) Hard point c) Heera metal. XI. A credit perod of 10-15 days can be offered to stockists in place of the Cash and carry system to encourage them to supply to small scale manufacturers.XII. To convert all order in wider width order to increase the productivity for Hindalco as well as customers.XIII. To maintain better delivery and quality of product.XIV. To keep close watch on competition region wise and customer wise in market as market is highly price sensitive and cheaper competitors‟ products are available.XV. Cheap material fans consume more power though there is no apparent exterior difference. Customers need to be educated of this through advertisement.XVI. When it comes to production of Flat Rolled Products, the rollind capacity of the various plants are- Renukoot- 80,000 tpa Belur- 45,000 tpa Taloja- 50,000 tpa 52
  53. 53. [TYPE THE DOCUMENT TITLE] [Pick the date] Mouda- 30,000 tpa The wider sheets are brought from Renukoot and the rest of the supply is done from Belur. The production capacity of Belur should be increased since the local demand if manufactured locally, reduces Transportation cost, Loading and Unloading cost, Packing cost.9 CONCLUSIONALUMINIUM -- ROAD AHEADThe outlook for the Metal sector in India is bright. Sustained growth is expectedacross all key segments, aided by several factors such as, growing domesticdemand, investment in capacity addition, increasing supply deficit in othercountries and favorable government regulations. 53
  54. 54. [TYPE THE DOCUMENT TITLE] [Pick the date]• Government‟s initiatives such as power and infrastructure development,reduction in import duties and facilitation of FDI, along with overall economicgrowth will provide a boost for the Indian metal industry• With economy projected to grow at 8 to 9 per cent in the coming years, thereis expected to be a surge in per capita metal consumption.• For aluminium, exports will be a major demand source .The metal sector inIndia, is clearly an attractive sector for investment and offers significant growthpotential, both in the domestic as well as exports markets. Metal companiesmust assess their core competency and realign their strategy to cope with theinternal and global competition.The outlook for domestic aluminium sector is positive. It is predicated on thelikely strong growth in the end-use sectors, notably in the construction,transportation, consumer durables and packaging sectors. The positive outlookfor the Indian economy, expected GDP growth of 8-9% per annum andaccelerating level of industrial activity should give boost to the constructionsector. The fiscal incentives for individual housing in recent budgets,availability of cheaper finance, rising per capita income and increasing level ofconsumer confidence will drive housing demand in future. Together with therenewed focus on infrastructure development, it will reinforce the outlook forthe construction sector. Gaining from it and the increasing preference for use ofaluminium in curtain walling, partitions and door/window panelling, aluminiumconsumption in the construction sector is slated to grow in double digits overthe next two years.The expected strong growth in the transportation sector will be a key driver ofaluminium demand going forward. The share of transportation in aggregateconsumption is expected to rise significantly in the future.This will be driven by improving volumes of commercial vehicles on the backof a pick-up in industrial activity, introduction of new vehicles by internationalcar manufacturers and a shift towards aluminium use in select applications bydomestic car manufacturers.Additionally, higher disposable incomes and improving level of consumerconfidence coupled with rising aspiration levels and changing consumer buyingpattern is likely to boost demand for consumer durables in future. The prospectsof an increased consumption in the electrical sector are improving with the entry 54
  55. 55. [TYPE THE DOCUMENT TITLE] [Pick the date]of the private sector in the distribution sector and restructuring of the StateElectricity Boards by the Government. The need for strengthening distributionnetwork in the power sector also augurs well for aluminium consumption infuture.FUTURE OUTLOOK-The future in the fan blade industry is bright. The industry is growing in EasternIndia at 9% p.a.The company should run advertising and promotional strategy and campaigningto the full so the awareness is increased by a large percentage.The metal sector in India, is an attractive sector for investment and offerssignificant growth potential.Hindalco aluminium is far superior in quality than that of its ifthe customers can be convinced, the business of Hindalco sheets would increaseby a large margin.If the pricing is made more competitive, it has the potential to go on to becomethe best in terms of volume of sales.10 BIBLIOGRAPHY a) http// etc b) http// c) Journals -- 55
  56. 56. [TYPE THE DOCUMENT TITLE] [Pick the date] i. Business Indiaii. Business World iii.The Economist d) Corporate Observer 56