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Transcript of Internship Report
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Batala Steels
TABLE OF CONTENTS
Serial # Description Page#
01 Executive
Summary
03
02 Industry profile 04
03 Analysis of steel
industry
05
04 Vision 09
05 Mission 10
06 Quality policy 11
07 Testing facility 12
08 Process 14
09 Hierarchy and
Departments
17
10 Administration and
personnel
Department
18
11 Marketing
Department
20
12 Accounts
Department
24
13 Strengths 26
14 Weaknesses 27
15 Opportunities 28
16 Threats 29
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Batala Steels
17 Plausible Problems 30
18 Reccomendations 32
19 Conclusion 33
20 Bibliography 34
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Batala Steels
EXECUTIVE SUMMARY
Prior to detailed description, I am stating the summary of internship report. Basic
purpose behind this is to give a clear view of the efforts that have been taken to
complete the program.I was assigned to work in Batala steels as internee for the
practical exposure. My job was started on 08 NOV, 2010 till Dec 28,2010 with aim
to study each and every aspect of organizational setup, departmental working,
working process and the documentation proceed by the organization.I being the
BBA student was deputed in Administration and personnel department.The report
in hand consists of my six weeks experience during internship. The report starts
with introduction of the organization,which covers detailed history and
background,and products downstream industry, organizational structure and some
other important aspects. After there are functions performed by different
departments working in the organization.As we all are aware that development and
growth of any country is largely dependent upon the iron and steel industry. So the
improvements and development of that industry is of much importance for any
country and especially the developing countries like Pakistan. Although,Batala
steel is working well in this current political and economic unstable environment
but still there is room for improvement.
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Batala Steels
INDUSTRY PROFILE:
Most Pakistanis do not realize that a Steel Mill is actually more essential than a nuclear
plant, or a missile. A steel mill is the backbone of the infrastructure of any country. Whether
it is roads, bridges, or sugar mills, everything comes from a steel mill.
After independence in 1947, it did not take long for Pakistan to come to the realization that
progressive industrial and economical development would be impossible without the
possession of a self reliant iron and steel making plant. The dependence on imports would
cause serious setbacks to the country along with an extortionately high import bill which
would be impossible to support.
Unfortunately Pakistan could not get a steel mill from 1947-1973. Most powers would not
sell the technology that could undermine the industrial prowess as well as the export
capability of Western enterprise.
The initial idea for a domestic iron and steel mill was put forward in the first five year plan of
Pakistan (1955 - 1960). Debates over the manufacturing process, supply sources of the
requisite machinery and raw materials, plant site, domestic ore versus imported ore,
ownership pattern, product mix and above all foreign financing credit kept the project onhold
for a considerable time.
The steel industry is often considered to be an indicator of economic progress, because of
the critical role played by steel in infrastructural and overall economic development. The
volume of steel consumed has been the barometer for measuring development and
economic progress. Whether it is construction or industrial goods, steel is the basic raw
material. However with the advancement in technology, lighter metals and stronger alloys
have been developed. Plastics and synthetics have replaced steel in many areas.
Still, “Steel” today is one of the most common materials in the world, with more than 1300
million tons produced annually. It is a major component in buildings, infrastructure,
tools,ships, automobiles, machines, appliances, and weapons.
The ores used in making iron and steel are iron oxides, which are compounds of iron and
oxygen. The major iron oxide ores are
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Batala Steels
A Brief Analysis of the Steel Industry in Pakistan:
Hematite, which is the most plentiful
Limonite, also called brown ore
Taconite
Magnetite, a black ore
The three raw materials used in making pig iron (which is the raw material needed to make
steel) are the processed iron ore, coke (residue left after heating coal in the absence of air,
generally containing up to 90% carbon) and limestone (CaCO3) or burnt lime (CaO), which
are added to the blast furnace at intervals, making the process continuous. The limestone or
burnt lime is used as a fluxing material that forms a slag on top of the liquid metal. This has
an oxidizing effect on the liquid metal underneath which helps to remove impurities.
Approximately two tons of ore, one ton of coke, and a half ton of limestone are required to
produce one ton of iron.
There are several basic elements which can be found in all
commercial steels:
Carbon is a very important element in steel since it allows the steel to be hardened
by heat treatment. Only a small amount of carbon is needed to produce steel: up to
0.25% for low carbon steel, 0.25-0.50% for medium carbon steel, and 0.50-1.25% for
high carbon steel. Steel can contain up to 2% carbon, but over that amount it is
considered to be cast iron, in which the excess carbon forms graphite.
The metal manganese is used in small amounts (0.03-1.0%) to remove unwanted
oxygen and to control sulfur. Sulfur is difficult to remove from steel and the form it
takes in steel (iron sulfide, FeS) allows the steel to become brittle, or hot-short, when
forged or rolled at elevated temperatures. Sulfur content in commercial steels is
usually kept below 0.05%.
A small quantity of phosphorus (usually below 0.04%) is present, which tends to
dissolve in the iron, slightly increasing the strength and hardness. Phosphorus in
larger quantities reduces the ductility or formability of steel and can cause the
material to crack when cold worked in a rolling mill, making it cold-short.
Silicon is another element present in steel, usually between 0.5-0.3percent. The
silicon dissolves in the iron and increases the strength and toughness of the steel
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Batala Steels
without greatly reducing ductility. The silicon also deoxidizes the molten steel
through the formation of silicon dioxide (SiO2), which makes for stronger, less porous
castings.
Types of Steel Mills:
INTEGRATED MILL:
Integrated mills are large facilities that are typically only economical to build in
2,000,000 ton per year annual capacity and up. Final products made by an integrated
plant are usually large structural sections, heavy plate, strip, wire rod, railway rails,
and occasionally long products such as bars and pipe.
A Brief Analysis of the Steel Industry in Pakistan
An integrated steel mill has all the functions for primary steel production:
Iron Making (conversion of ore to liquid iron),
Steelmaking (conversion of pig iron to liquid steel),
Casting (solidification of the liquid steel),
Roughing Rolling/Billet Rolling (reducing size of blocks)
Product Rolling (finished shapes).
Because of the energy cost and structural stress associated with heating and cooling a blast
furnace, typically these primary steelmaking vessels will operate on a continuous production
campaign of several years duration. Even during periods of low steel demand, it may not be
feasible to let the blast furnace grow cold. Due to the large employment of integrated
plants, often governments will financially assist an obsolescent facility rather than take the
risk of having thousands of workers thrown out of jobs.
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Batala Steels
MINI MILL:
A mini-mill is traditionally a secondary steel producer. Usually it obtains most of its
iron from scrap steel, recycled from used automobiles and equipment or byproducts
of manufacturing.
A typical mini-mill will have an electric arc furnace for scrap melting, a ladle furnace or
vacuum furnace for precision control of chemistry, a strip or billet continuous caster for
converting molten steel to solid form, a reheat furnace and a rolling mill.
Often a mini-mill will be constructed in an area with no other steel production, to take
advantage of local resources and lower-cost labor. Mini-mill plants may specialize, for
example, making coils of rod for wire-drawing use, or pipe, or in special sections for
transportation and agriculture.
Capacities of mini-mills vary; some plants may make as much as 3,000,000 tons per year, a
typical size is in the range 200,000 to 400,000 tons per year, and some old or specialty
plants may make as little as 50,000 tons per year of finished product. Since the
electric arc furnace can be easily started and stopped on a regular basis, mini-mills
can follow the market demand for their products easily, operating on 24 hour
schedules when demand is high and cutting back production when sales are lower.
Another element that plays an important part in the processing of steel is oxygen.
Some large steel mills have installed their own oxygen plants, which are located near
basic oxygen furnaces. Oxygen injected into the mix or furnace "charge" improves
and speeds up steel production.
Steel can be given many different and useful properties by alloying the iron with
other metals such as chromium, molybdenum, nickel, aluminum, cobalt, tungsten,
vanadium, and titanium, and with nonmetals such as boron and silicon.
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Batala Steels
The steel industry in Pakistan comprises the following:
Steel Melters: this segment, re-melts both imported as well as locally
generated scrap to largely produce cast billets and thin ingots; total installed
capacity of this segment is estimated at 2.0mtpa.
Steel Re-rollers: this segment largely comprising manually operated cross-
country mills that use billets, thin ingots, slabs and rollable materials to
make rebars and steel sections; total installed capacity of this segment is
estimated at 3.2mtpa.
Ship Demolition Industry: this segment supplies re-rollable / remeltable
scrap, using relatively obsolete demolition technology; current output is
estimated at 0.2mtpa.
It can't be denied in the modern times that an overall development of a country
depends to a greater extent on Iron and Steel Industry because we are passing
through the 'Steel Age', where right from a sewing needle to aircraft all the goods
require iron and steel to come into being. Iron and steel is indispensable to use for
making machines, tools, war items and other various goods of daily life.Rail tracks,
rail bogies, aero-planes, ships, motor cars, bridge dams, tunnels and pipe lines
required iron and steel.
Significance of iron and steel could be accessed through the following facts:
a) Fast, modern and cheap means of transport play decisive role in the economic
development of a country. For this purpose, rails, ships, aero planes, motor vehicles
etc.
b) If the supply of consumer’s goods are abundant in a country, it is the symptom
that the country is self sufficient and does not depend on others. The consumer’s
goods are made on machines which are made of iron and steel.
In the light of this discussion, it could confidently be concluded that if a country is
deficient in iron and steel,it should not dream for the economic development.
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Batala Steels
Vision
As our forefathers laid down a foundation of solid business practices upon which to build a
future for generations to come, our vision at batala steel is principled in the same way.
When this nation was born, Batala Steel was an inherent factor in development of
infrastructure and transportation, helping bridge the new nation and keep it together as a
single cohesive unit.
In the 21st century, Batala Steel sees itself as the foundation of all rural development in
Pakistan. As our nations' furthest recesses continue to industrialize and mature, Batala Steel
finds itself at the core of all the upcoming groundbreaking development.
Batala Steel is committed to the prosperity and growth of this nation and as such will lend
itself to further that commitment. Generations of the Batala Steel Corporate Family will stand
buy and build this nation to greatness.
Batala products:
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Batala Steels
Mission Statement
At Batala Steel our top priority has always been the manufacturing of a top quality product
that meets international standards, giving the label "Made in Pakistan" the honor and dignity
that is commands. We pride ourselves on the production of an excellent steel product that is
unmatched in Pakistan, a product that is favoured by our loyal customers in Pakistan and
across the world.
With trainings and seminars to keep our employees at par with international industry
standards, and competitive pricing to stay competitive with the market, our aim for the future
is to make sure that Batala Steel remains a front-runner in the steel industry.
Greater response to customer's present & future needs.
Focus on productivity and Quality.
Facing Challenges of free Market Economy.
Ensuring higher rate of return on invested capital.
Developing Human resource and motivating employees through
empowerment and hard consequences.
Safe Working and Environment friendly conditions.
Minimizing process wastages, rejections and recycling .wastes.
Good Governance.
Fulfilling Social Obligations.
Improving Corporate Image.
We at BATALA STEEL believe that Quality is not just a manufacturing specification
but it is something which is to be internalized. We measure customer satisfaction above
all and endeavor to achieve it by maintaining the quality standards in products we
deliver.
For this we have a well equipped quality lab with latest testing facilities. We conduct
various chemical and mechanical tests to ensure the required specification. The testing
is done under our proficient and diligence staff. The quality department promptly
reports the feedback to the production department and thus ensures that every single
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Batala Steels
product produced is of top quality.
Quality Policy
The Company is committed to:
Ensure maximum customer satisfaction by maintaining the consistency in
quality.
Respond innovatively and competitively to the changing needs of our customers
through persistently adapting new technologies with the same excellence.
Fulfill its legal and statutory obligations and international standards.
Involve manufacturing processes that are environment friendly
We at Batala Steel, strictly adhere to the ASTM and BSI international standards. For
this purpose we have established most modern laboratories to maintain the highest
quality precision standard. The perfection of our work has captured the sharp eyes of
discerning clients, in the public and private sector including some of the top
multinational construction firms. To produce high quality steel according to the requires
specification, Batala Steel is equipped with both chemical and physical laboratories at
our site in lahore. Prime Quality M.S billets are processed through semi-automatic re-
rolling plants, which are designed to manufacture standardized products of exact and
international specifications; special attention is paid to the custom requirements
instruction of each particular client. Beside these we have potential to meet special
requirements of our customers.
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Batala Steels
Testing Facilities:
The physical testing laboratory at batala steel is equipped with modern testing
equipment,well maintained and regularly calibrated by reputed agencies including
Engineering University Lahore. The laboratory is capable of performing several requisite
tests on mild steel manufactured. Frequent tests are performed for each heat / lot on in-
coming, in-process and final dispatch stage.Apart from the usual physical testing
laboratory, batala steel is the only steel industry in Pakistan to have the chemical testing
facilities through most advanced but expensive - Spectrolab. This enables the company
to apply comprehensive quality control measures at input, in process and final stage.
Installed with latest and modern testing equipment, chemical and physical testing
laboratories of batala steel are taken at par with any internationally recognized testing
laboratory
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Batala Steels
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Batala Steels
PRODUCTION PROCESS OVERVIEW
A brief overview of the production process at Batala steels is as follows:
Raw Materials:Main raw materials used are fine iron ore, lump iron
ore, sinters, coke (which is made in house in the coke oven batteries),
and fluxes (i.e. limestone, dolomite, quartzite, fireclays, etc).
Currently Batala steels, imports 100% of it iron ore and coal
requirements, whereas fluxes are procured locally.
Melting:Raw materials are charged in the blast furnace where hot air
and a calculated quantity of natural gas is pumped to melt the iron
and fluxes. The molten metal from this process is further refined to
make steel. Other outputs from this process include pig iron (which
is a solidified state of the molten metal) and slag (which is a mixture
of fluxes and foreign matter from ore, and is used in the
manufacturing of cement).
Steel Making:Molten metal from the blast furnace is taken to the
steel making plant where further reduction of impurities is done in an
oxygen furnace (Linz Donawitz converters). The crude steel in liquid
form is taken in a ladle for further refining, where ferroalloys are
added to the liquid steel.
Casting:Batala steel employs continuous casting technology to cast
the liquid steel into semi-finished products (i.e. cast billets, blooms
and slabs). Cast billets are sold without any further processing
whereas blooms and the slabs are further processed at the Billet Mill
and the Hot Strip Mill respectively.
Finishing:Semi-finished products such as blooms and slabs are
reheated at high temperatures in the reheating furnaces to make the
metal malleable and then rolled into finished products at the rolling
mills. Batala steels, currently has a Billet Mill, a Hot Strip Mill and a
Cold Rolling Mill.
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Batala Steels
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Batala Steels
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Chairman
Board of directors
Administration and personnel department
Marketing department Accounts department
Batala Steels
Organization Hierarchy:
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Batala Steels
DEPARTMENTS:
Administration and personnel Department
Marketing Department
Accounts department
Administration and personnel department :
This department is responsible for overall administrative and personnel matters in
accordance with the policies, rules and regulations including welfare of employees.
The following are the various section of A & P Department.
A. Personnel ‘A’ Section :
This section deals with maintenance of personal files of all officers including the
personal files of the officers of those departments who have not been delegated the
administrative powers.
B. Leave and complaint Section :
This section deals with maintenance of leave records of all the Officers and
workers and issues leave advices of the officers from all levels including of
those departments who have not been given authority.
C. P & C Section :
Policy and Coordination section is the main part of A&P department
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Batala Steels
where policies and rules and regulations of officers & workers maintained.
All management policies are implemented in batala steel through this section.
It also deals with top management cases as well as routine matters.
D. Enquiry Cell :
Enquiry cell deals with initiating necessary disciplinary actions
against the officers involved in misconduct corruption cases, carrying out
investigation and examination of enquiry reports of the completion of
disciplinary cases as per Batala steel officers service rules and
regulations.
E. Dues Settlement and Verification Cell :
This cell is established to facilitate the ex-employees as well as
dependents of deceased employees for settlement of their final dues
through accounts departments / provident fund gratuity fund.
F: Recruitment and selection section:
This section deals with the recriutment and selection process of new employees.
Quality Policy of Administration & Personnel
Administration and Personnel department commits to:
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Batala Steels
Manage and care the employees for better productivity, organizational
growth.
Appropriate staffing according to work requirements.
Maintain quality of work life.
Strive for corporate culture improvement.
Marketing Department:
The function of Marketing Department is to optimize the sale revenue in
order to achieve the organizational objectives by adopting affective Marketing
system to sell Batala steel main products and by-products at the best
achievable competitive prices.
To achieve targeted sales directed towards attaining organizational
objectives, a board based sales policy is adopted which provides the guideline
for the Marketing department as well as the customers. The sales policy, by
implementing the standard terms and conditions of sales contracts safeguards
the interests of Batala steel as well as its customers in a balanced way.
Customers i.e. traders and consumers (especially industrial consumers) play a
pivotal role in the sale of Batala steel products.
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Batala Steels
Preparation of Sales Policy:
The sales policy of Batala Steel is prepared with immense care and
vigor on the basis of past experience and achievements keeping in view the
customers demand and market conditions. It reflects the plus points of the
previous Sales policies and maturity of policy makers. Sales policy is the result
of hectic efforts of marketing personnel who carryout in depth survey/study of
the market and keep vigilant eyes on the changing domestic as well as
international Iron & Steel markets. While making the sales policy, due care is
taken to the future need of BATALA Steel and its relations with its
customers.Sales policy is placed before the Price Fixation and implemented after
due approval.
Pricing:
The prices of Pakistan steel products are fixed by a price Fixation/review
committee comprising:
Chairman
Director (Marketing)
Since the production of BATALA steel products are based on imported raw
materials, the prices are subject to change without notice. While reviewing the
prices of products, following factors are taken into consideration:
Market conditions
Market Acceptance
Protection against imports
Competitors
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Batala Steels
Landed cost of imported materials
Government fiscal policies
Production & Quality range
Cost of production
Dealership section:
This section is assigned following jobs:
Entertain various dealership applications.
Point out deficiencies in respect of each application.
Maintain close liaison with Sales Accounts department for the issuance of
official receipts of security amount received on account of dealership.
Maintain up-to-date record of Traders & consumers/Dealers.
Reply the queries received from customers, Government agencies Internal
and External Auditors and Ministry of Industries and Production.
Market intelligence
i. Study various steel Journals and Newspapers to find out useful
data, information related to Iron and Steel Industries, their
gradual development and Marketing strategies.
ii. Determine demand of Iron and Steel products in the domestic
as well as international markets and fluctuation of prices thereof.
iii. Find out prospective/new buyers of Iron and Steel products.
iv. Keep record of international prices.
v. Keep track history of prices of Batala steel products.
vi. Keep record of domestic prices of Iron & Steel products.
vii. Keep record of ITP (Import Trade Price) value.
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Batala Steels
viii. Determination of landed cost of international prices.
ix. Submit papers/materials for review meeting.
Data coordination Section:
This section perform the following functions
Maintain up-to-date record of stocks.
Maintain up-to-date record of commercial dispatches of Batala Steel
products.
Maintain the price history of BATALA Steel products.
Maintain up-to-date dealership list.
Administration section:
This section is responsible for overall administrative functions of marketing
department and to perform following jobs:
Maintain the personal files in respect of officers, Staff, Retainer and Daily
wage Workers.
Prepare the daily attendance.
Prepare the monthly attendance of Officers Staff, Retainers and Daily wage
Workers.
Liaise with Central administration in connection with issue of leave advice
leave balance and other administrative matters.
Look after the general maintenance of sale department i.e. Lighting,
Electric Fans, Air conditioners, White wash, Fixture and Fitting etc. Take
care, of the stationary requirement of entire Sales department.
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Batala Steels
The Accounts department:
Accounts department is working under the supervision of Director Accounts.The
accounts section of any organization is called the base point for the provision of
data. This department basically works for the preparation of financial statements of
the corporation, disbursement of the salary to employees. Payments to suppliers/
contractors/ service provider and cash management. All financial transactions are
recorded, summarized and consolidated in accounts department in form of:
A. Journals B. Ledgers C. Trial Balance D. Income statement E. Balance sheet
The department is divided to three sections for its smooth working those are:
1) Final Accounts
The main function of this section as appears from its name is to
finalize annual accounts of BATALA steel. In addition to finalization of
annual accounts, monthly and quarterly are also compiled provisionally.
However few working groups in this section carry out other functions like
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Batala Steels
maintenance of fixed assets. Annual finalization of accounts is very
important because annual audit is based on the accounts for the year.
Final account section coordinates with external auditors to complete
statuary audit within stipulated time specified by the securities.
Following books of accounts are maintained by final account section.
General ledger
Trial Balance
Financial Statement
Balance Sheet
Cash flow statement
2) Bills Section
This section handle the all payment which are made by the
Batala steel to the contractors, dealers, suppliers, service provider,
transportation charges.
3) Cash section
Cash section management starts when order for purchase of raw material
or other goods is placed and ends when payment is realized from sales. All
these activities between these events fall when within the realm of cash
management. Cash management is the process whereby the cash inflows and
outflows are balanced so that current obligation is met in time and any excess
cash is invested to earn income. It also includes ability to obtain credit so that
the corporation can have access to cash to finance temporary cash deficits.
Rules and Regulations of Cash Section
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Batala Steels
The function of handling receipts and payments is completely separated
under cash section.
All transaction of receipts and payments are accounted for in the books by
other concerned department.
All disbursement is made by cheques on the instruction of dealing
department.
Cheques are signed on the basis of approved invoices and vouchers.
Cheques are counter signed by the person outside cash section.
After preparation of cheques supporting documents are endorsed for this
effect.
Daily report of receipt, disbursement and balances available in the banks is
prepared. Cumulative receipts and payments for the month are also shown.
STRENGTHS
Pakistan defense industry is relying mostly on domestic steel industry
which is a major buyer of steel.
Cheap labor
Batala steel has made arrangement for its scientific quality control test at
every stage of production to maintain the high quality of its products.
Batala steel has mainframe computer to keep the record of whole type of
data and other informations about Pakistan Steel products.
Batala steel has received ISO 9001 (quality certificate) ISO
14001(certification of environmental science management system).
Batala steel possess number of achievements which serve as their
competitive advantge like prime minister trophy 2008 , Buisness man of the
year 2009, best achievement 2005, LCCI achievement award 2007, lesco
valued customer award.
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Batala Steels
WEAKNESSES
Limited Capacity to fulfill demand.
Declining Skilled work force.
Batala steel has no efficient research and development department which is
key to product innovation and process innovation.
Capital repair has not been made from last many years, which affect the
quality of products and speed of production.
Batala steel has highly centralized system of decision making, due to this
delay in work does occur. Lengthy procedure and too much documents
resulted in delays of many urgent in many urgent policies to implement.
Too many departments of batala steel contributing very less profit to batala
Steel, as compare to the cost.
Labor productivity in Batala is low because of workers dissatisfaction.
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Batala Steels
Lack of R&D investment.
Dependence on imports for steel manufacturing equipments and
technology.
Price of domestic steel is dependant on international markets..
Machinery is old and needs repairs and upgrades.
OPPORTUNITIES
Abundant Coal available to Steel Mills.
Abundant Iron ore Available domestically.
Increase in prices and demand of steel world wide.s
The large iron ore and coal reserve of Pakistan provide good opportunity in
the steel sector for enterprising investors.
The Engineering and Development Board (EDB) of the ministry of
industries and production has evolved the long term ‘National Steel Policy’
with a view to cover the widening demand and supply gap by achieving a
production target of 15 million tonness of steel by 2020.
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Batala Steels
Pakistan to shift its focus from textile & agriculture to heavy industries.
( heavy industries 60 % of world trade) vision 2030.
Kalabagh and Chiniot have known deposits of iron ore that have not yet
been excavated and utilized by the local steel industry, as importing iron
ore, iron and steel scrap was cheaper than mining local ore a capital-
intensive venture. With global steel and iron ore prices skyrocketing there
is hope that both International and domestic steel makers have finally
decided to excavate and exploit local reserves.
THREATS
High tax.
Political Instability.
Slow growth in infrastructure development.
Possibilities of export growth from China.
Increased vulnerability to international market trends.
Increase in World iron ore prices.
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Batala Steels
The prices of steel industry have sharply increased as the current energy
shortage in the country has almost stopped production at steel furnaces.
This stoppage has led to reduced supplies of raw material like iron billets
and ingots to the steel re-rolling industry.
Energy crisis is biggest threat.During the last few days, the prices of T-iron
and iron belts increased by Rs3,000 to Rs5,000 per metric ton, reaching
Rs48,000 to Rs50,000 compared to previous Rs43,000 to Rs45,000.
Plausible problems:
PRICE is one of the biggest problem of this sector, As Pakistan import Iron
ores to make steel so as a rise in international prices the local prices also get
effected, international prices have raised about 200% due to which steel
prices were raised in Pakistan.
The rates of iron ore from which the steel was extracted in the steel mills
had increased sharply in past five years from $27.83 per tonne in 2002-03
to $73.45 per tonne in 2007-08. The current rates were above $85 per
tonne. The rates of billets that were the basic raw material for making steel
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Batala Steels
products have increased from $360 per tonne in 2005 to $750 per tonne in
2007 and are still rising.
Two major things should be taken in consideration when determining the
prices as prices mostly depend on production & operating cost to produce
Steel, and the cost of Raw meterial
1) Energy source
2) Raw Material
ENERGY SOURCES
The prices T-iron, iron belts and other allied products of the steel industry
have sharply increased as the current energy shortage in the country has
almost stopped production at steel furnaces due to which production of steel
was dropped and demand was not fulfilled so prices went high because
High demand and low supply result in increase in prices.This stoppage has
led to reduced supplies of raw material like iron billets and ingots to the
steel re-rolling industry.
Electricity and gas-shedding triggering an increase in prices of steel
products because when downstream mills will be unable to produce steel as
a result,demand and supply would alter and hence High demand and low
supply result in increase in prices.
Batala steels uses national gas and electricity to run the mill and furnace,
if there will be energy crisis,they won’t be able to do the required
production which will result in not fulfilling the demand, and consequently
result in high prices due to shortage of supply with high demand of steel,
secondly the electricity is getting so expensive that because of operating
cost the price of steel are getting high, national gas is also getting
expensive, because national gas when used for commercial use is very
expensive as compared to used for household.
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Batala Steels
In the re-rolling industry, a furnace takes a minimum of six hours to melt
billets and ingots, but breakdown of power supply restricts the furnace from
reaching the melting point. Once the furnace gets stopped due to power
suspension, it takes the same time again to restart and reach the melting
temperature which multiplies the production cost. On the other hand, the
raw material once put into the furnace could not be withdrawn till the
melting process is completed.Repeated melting of a raw material reduces
the quality of finished goods and increases the sales tax on the producers as
the tax is imposed depending on how many times a furnace is run ignoring
how many times asingle raw material is melted due to any circumstances.
This practice not only pushes up the cost of the re-rolling and melting
industry, but also enhances the ratio of wastage which is ultimately passed
on to the consumers.
Recommendations:
Improving Efficiency, Reducing Costs, and Increasing Overall
Competitiveness.
It is my recommendation that Batala steel should look forward to use
COAL as a source of energy because it will be more cheap as compared to
other sources.
Electric arc furnaces are a common method of reprocessing scrap metal to
create new steel, and this process does not need much electricity. This
process can also be used for converting pig iron to steel.
Focused research and development activities in collaboration with foreign
experts.
Development of Human capital.
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Batala Steels
As the Chinese are using Iron Ore with the properties similar to that of
Pakistani Ore, a visit of to Chinese Steel industry may also be arranged.
New Compensation plans should be designed in order to increase
Employees satisfaction level.
Conclusion:
During the course of my internship, I found that Batala steel was set up with an
objective to become market leader in the industry . Upto some extent it has been
successfully achieving this goal. Batala steel has a potential to grow and it can
capture bigger market share but unfortunately this big industrial unit is suffering
from various problems like employees dissatisfaction,lack of strategic direction,
weak financial position, and govt. positive attitude towards imports, due capital
repair, lack of cost control,corruption and inefficient use of resources. After
overcoming these problems, it can make its operations more efficient and can take
the advantage of expansion opportunity in order to exploit the future market for
iron and steel.
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Batala Steels
Bibliography:
http://www.nationsencyclopedia.com/Asia-and-Oceania/Pakistan-
INDUSTRY.html#ixzz0sn556kfD
http://www.arabianbusiness.com/591597-weak-gulf-steel-demand-
could-lead-to-oversupply
http://tribune.com.pk/story/13721/steel-industry-beset-with-problems-
despite-bright-prospects/
http://steelguru.com/interview/detail/132/
Making_Pakistan_steel_sector_strong.html
http://www.onepakistan.com/finance/news/pakistan-business-general-
news/4198-Year-end-review.html
http://www.fandmmag.com/web/online/Industry-News/Pakistan-
Proposes-to-Link-Domestic-Steel-Prices-with-International-Market-
Rates/1$3435
http://scrapnews.recycleinme.com/newsdetails-20.aspx
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Batala Steels
http://steeltimesint.com/news/view/pakistan-has-the-potential-to-
increase-its-steel-production-to-16mt-y
University of Central Punjab, PCBA-PICS