Steel industries

1. SUMMER TRAINING PROJECT REPORT
ON
“RAW MATERIAL & FINISHED
GOODS MANAGEMENT IN IRON
INDUSTRY”
PRESENTING BY-
MOHAN LAL DEWANGAN
MONNET ISPAT & ENERGY LIMITED

2. Company Background
 IncorporationYear
 Chairman
 Managing Director
 Company Secretary
 Capacity
 Turnover
 1990
 M S Gujral
 Sandeep Jajodia
 M P Kharbanda
 Sponge iron : 300,000
TPA
 TPA, MS Ingots & Billets
- 300,000TPA
 Rs. 216.61 Crores (Year
ended 31st March 2008)

3. Continue……..
 Auditor
 FaceValue
 Market Lot
 Registered Office
 O P Bagla & Co
 10
 1
 Monnet Marg Mandir Hasaud
Raipur Chhattisgarh 492101

4. MONNET ISPAT & ENERGY LIMITED
 Incorporated on February 1, 1990 & jointly
promoted by Mr. Sandeep Jajodia and Jindal Strips
Limited.
 Initial caacity 1,00,000TPA sponge iron
 Products are ,
 Sponge Iron
 Steel Billets & Ingots
 Structural Steel
 Ferro Alloys
 Power (MW)

5. VISION AND MISSION OF MIEL
 MIELVision
 To achieve holistic leadership in terms of cost, quality and
customer satisfaction in a systematic & planned manner.
 A symbol of corporate excellence with strong focus for
benefiting stakeholders and society at large.
 MIEL Mission
 To achieve total integration in operations with global cost &
quality standards with the use of latest technology and to
be perceived as the “preferred choice of our customers.”
 To build a team of motivated and dedicated workforce,
with high work ethos.
 To strive to emerge as an ideal corporate citizen.

6. Capacity
Product FY06 FY09
 Sponge Iron (tpa)
 Steel Billets & Ingots (tpa)
 Structural Steel (tpa)
 FerroAlloys (tpa)
 Power (MW) (tpa)
 4,70,000 8,00,000
 3,00,000 300,000
 2,00,000 200,000
 58,400 58,400
 45 90

7. SHARE HOLDER PATTERN
3%
38%
11%
38%
10%
No, of shares held
Indian Public
Promoters
Fis / Banks /
MF /UTI
FIIs
Corporate
Bodies

8. Raw Materials
 The company sources its entire coal requirement from a
captive coal mine at Raigarh that has estimated reserves
of 100mt. Apart from Raigarh, the company also has a
captive coal block in theTalcher coalfields and Mandakini
in Orissa, with reserves of 175mt.
 Monnet Global Ltd., has recently entered into an
agreement to acquire an 80 mt coal mine in Indonesia
thus improving the raw material availability in the future.
 The company has a captive power plant at Raipur with
the capacity of 90MW, which is expected to increase to
150MW.
 Currently, MIEL meets its iron ore requirement through
purchases in the domestic spot market.

9. Swot Analysis of MIEL
Strengths Weaknesses
 • Raw material security
with 100% captive coal
and power
 •Advantage of access to
advanced technological
inputs as a new
entrant.EAF is a major
advantage in controlling
production costs (cost of
~$83 over other pig iron
manufacturers)
 • Iron ore is bought at spot
prices with no long-term
contracts (0.9% negative EPS
impact for 1% rise in price).The
difference between spot and
contract prices in July 2008 was
~$32-42.Captive iron ore mines
will become operational by late
FY10E.
 • Exposed to steel price volatility
with 2.5% EPS sensitivity to 1%
change in prices Government
regulations may impact
expected average realisations
through price controls and
higher duties and taxes (~10-
20%).

10. Continue…….
 • Improving revenue mix
with the share of
structural steel to
increase from almost nil
(FY07) to 18% (FY10E).
This will further improve
on completion of 1.2 mt
steel facility in FY11E.
 • Improving financial
leverage with the debt
equity ratio declining
from 1.8 to less than 1.
 • Inadequate
infrastructure and
poor legal system for
labour, mine
development etc.
 • Inability to pass on
increases in costs to
its customers will
affect performance.

11. Continue…….
Opportunities Threats
 Diversification of revenues
through power generation;
has signed MoU with Orissa
Government to set up power
plant in Angul.
 Strengthening its raw
material procurement base
through acquisition of coal
and iron ore mines, including
the Rameshwaram mine
adding 30 mt of iron
ore, sponge iron facility, and
power plant.
 Slowdown in domestic and
global demand with a surge in
interest rates. In the worst
case scenario, the domestic
consumption of steel is
estimated to be 58 mt in
FY09E (9% increaseYoY) and
global demand to be 1,320 mt
in FY09E (3% increaseYoY).
 The steel industry is highly
cyclical and a decrease in
steel prices could have an
adverse effect on the
company’s operations and
financial condition.

12. Continue…….
 Huge industrial and
infrastructure demand.
 Rapid urbanisation and
increasing demand for
consumer durables.
 Indian per capita steel
consumption ~40 kg
compared to the world
average of ~173 kg
 Increased environmental
awareness due to the
perceived negative impact
of mining and steel making
operations on the
environment may increase
production costs.
 The infrastructure
development not keeping
pace with the growth in the
steel industry is a key
concern.

13. OBJECTIVE
 To have a study about availability of raw materials.
 Comparison with their competitors and study on
nature of functions.
 To have a study onTechnological advancement of
the organization.
 To have study on share holder patterns and revenue
mix.
 To have a study on facility and health awareness
providing by the firm.
 To have a study on on-going projects and future
prospects and their impacts.

14. FINDINGS
 Raw material security with 100% captive coal and power.
 Advantage of access to advanced technological inputs as a new
entrant. EAF is a major advantage in controlling production
costs.
 Improving revenue mix with the share of structural steel to
increase from almost nil (FY07) to 18% (FY10E).This will further
improve on completion of 1.2 mt steel facility in FY11E.
 The company is providing good health and safety facility.
 Project under completion which can place this company at the
top and could able to achieve high revenue e.g.
 1.2 mt integrated steel plant at Raigarh
 Captive power plant at Raipur
 Acquisition of Rameshwaram Steel and Power Ltd

15. LIMITATIONS
 Iron ore is bought at spot prices with no long-term contracts
(0.9% negative EPS impact for 1% rise in price).The difference
between spot and contract prices in July 2008 was ~$32-42.
 Exposed to steel price volatility with 2.5% EPS sensitivity to 1%
change in prices. Government regulations may impact expected
average realisations through price controls and higher duties and
taxes.
 Inadequate infrastructure and poor legal system for labour, mine
development etc.
 Inability to pass on increases in costs to its customers will affect
performance.
 The steel industry is highly cyclical and a decrease in steel prices
could have an adverse effect on the company’s operations and
financial condition.

16. PERSONAL EXPERIENCE
 Living a Routine Life:
 The summer training taught me to live a routine life, as I have to report
to the office early in the morning at 9:30 am and do the work till 5:30 pm. So 9
am to 5:30 pm working hours gave me the feeling of a part of an organization.
 To chalk out a plan for the next day, to go to the plant and meet to plant
assistant getting a brief idea about manufacturing process, listening their area of
problems while the manufacturing, imports of raw material, plant management
and working condition.
 My confidence to communicate people has tremendously gone up.Today I have
that much of confidence that I can meet to any big person in any organization as
well as can intermingled with the common people of any class as a very cordial
one.
 How an organization distribute the raw materials in a proportionate way so that
the process of the various department going on in a simultaneous process.
 I have got a brief idea about steel and Ferro alloy industry, how the govt. policy
effects the manufacturing and revenue.

17. Recommendation
 Iron ore should bought with long-term
contracts so that manufacturing cost could be
more less.
 They should improve their inadequate
infrastructure and poor legal system for
labour, mine development etc.
 More awareness programme for health and
CSR.
 Should not release gases & dust without
filter.

18. THANKING
YOU