Chapter - 4

Profile of Steel Authority of India

Limited
4.0 INTRODUCTION
4.1 BRIEF HISTORY OF STEEL AUTHORITY OF INDIA LIMITED
(SAIL)
4.2 OWNERSHIP AND MANAGEMENT
4.3 VISION
4.4 BOARD OF DIRECTORS
4.5 PLANTS AND PRODUCTS OF SAIL
4.6 JOINT VENTURES OF SAIL
4.7 MEMORANDUM OF UNDERSTANDING
4.8 MODERNIZATION AND EXPANSION
4.9 PRODUCTION AND CAPACITY
4.10 MANUFACTURING PROCESS
4.11 MAJOR ACHIEVEMENTS
4.12 ENVIRONMENT POLICY
4.13 HUMAN RESOURCE POLICY
4.14 SWOT ANALYSIS
4.15 CORPORATE GOVERNANCE
4.16 CORPORATE SOCIAL RESPONSIBILITY
4.17 FINANCIAL HIGHLIGHTS OF SAIL
4.18 CHAPTER SUMMARY
REFERENCES
Chapter – 4 Profile of Steel Authority of India Limited

Chapter - 4

Profile of Steel Authority of India Limited

4.0 INTRODUCTION

Steel Authority of India Limited (SAIL) is a leading steel-making company in India

and one of the seven Maharatnas Central Public Sector Enterprises. It has fully
integrated iron and steel plants and produces basic and special steel products. It caters
the need of construction, engineering, power, railway, automotive and defence
industries in India (SAIL, n.d.) and also exports it to overseas markets. SAIL
produces a broad range of steel products, like hot &cold rolled sheets and coils,
galvanized sheets, electrical sheets, structurals, railway products, plates, bars, rods,
stainless steel and other alloy steels (SAIL, 2014).

SAIL has five integrated plants i.e. Bhilai Steel Plant, Durgapur Steel Plant, Rourkela
Steel Plant, Bokaro Steel Plant and IISCO Steel Plant and three special steel plants i.e.
Alloy Steel Plant, Salem Steel Plant and Visvesvaraya Iron and Steel Plant. All these
plants are located in the eastern and central regions of India. These plants are situated
close to domestic sources of raw materials. SAIL also has Company’s iron ore,
limestone and dolomite mines near its plants. SAIL is the India’s second largest
producer of iron ore and has the country’s second largest mines network. Therefore,
SAIL is competitive in terms of availability of iron ore, limestone, and dolomite, the
inputs for steel making.

SAIL has a Central Marketing Organization (CMO) which has a network of 37

Branch Sales Offices spread across the country, 25 Departmental Warehouses, 42
Consignment Agents and 27 Customer Contact Offices. CMO has the responsibility to
carried out the marketing of wide range of long and flat steel products which are
much in demand in India as well as in the overseas markets. The demands of
customers in the remote areas of the country is meet by an ever increasing network of
rural dealers, these dealer supplemented marketing efforts of CMO in domestic
market. At present there are more than 2000 rural dealers in the country. SAIL's wide
spread marketing ensures availability of quality steel in all the districts of the country.

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Exports of Mild Steel products and Pig Iron from SAIL’s five integrated steel plants
are undertaken by International Trade Division (ITD). ITD is an ISO 9001:2000
accredited unit of CMO, located at New Delhi.

SAIL's Consultancy Division (SAILCON) located at New Delhi, with four decades of
technical and managerial expertise and know-how in steel making, offers services and
consultancy to clients all over the world.

SAIL has a well-equipped Research and Development Centre for Iron and Steel
(RDCIS) at Ranchi which helps to produce quality steel and develop new
technologies for the steel industry. SAIL also has its own in-house Centre for
Engineering and Technology (CET), Management Training Institute (MTI) and Safety
Organization at Ranchi. Captive mines of SAIL are under the control of the Raw
Materials Division in Kolkata. The Environment Management Division and Growth
Division of SAIL operate from their headquarters in Kolkata (SAIL, n.d,).

4.1 BRIEF HISTORY OF STEEL AUTHORITY OF INDIA LIMITED (SAIL)

After the independence of India, a need was felt to develop the infrastructure for rapid
industrialization of the country. The steel sector was crucial to propel the economic
growth of the country. Therefore, Hindustan Steel Private Limited (HSL) was set up
on January 19, 1954. Initially, HSL was designed to manage only one plant that is
Rourkela steel plant. The preliminary work was done by the Iron and Steel Ministry
for Bhilai and Durgapur Steel Plants. But the supervision and control of Bhilai and
Durgapur steel plants were also transferred to Hindustan Steel from April 1957. The
registered office of HSC was originally in New Delhi but later, it was moved to
Calcutta in July 1956 and ultimately to Ranchi in December 1959 (SAIL, n.d)

Bhilai and Rourkela Steel Plants completed their 1 Million tonne stage by the end of
December 1961. One Million tonne phase of Durgapur Steel Plant was completed in
January 1962, after commissioning of the Wheel and Axle plant. The crude steel
production of HSL increased from .158 Million Tonne in 1959-60 to 1.6 Million
Tonne. Bokaro Steel Limited was established in January 1964 to construct and
operate the steel plant at Bokaro. Bhilai Steel Plant completed its second phase in
September 1967, after commissioning of the Wire Rod Mill. Tandem Mill, the last

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unit of 1.8 Million Tonne phase of Rourkela was commissioned in February 1968 and
the 1.6 MT stage of Durgapur Steel Plant was completed in August 1969, after
commissioning of the Furnace in SMS. With the completion of the 2.5 MT stage at
Bhilai, 1.8 MT at Rourkela and 1.6 MT at Durgapur, the total crude steel production
capacity of HSL increased to 3.7 MT in the year 1968-69 and to 4.0 MT in the year
1972-73 (SAIL, n.d).

The Ministry of Steel and Mines presented a newly drafted policy statement to the
Parliament on December 2, 1972 to evolve a new model for managing the steel
industry by creating a holding company to manage inputs and outputs under one
umbrella. Based on this, Steel Authority of India Ltd was incorporated on January 24,
1973, with an authorized capital of Rs. 2000 crores. SAIL was made responsible for
managing five integrated steel plants at Bhilai, Bokaro, Durgapur, Rourkela and
Burnpur, the Alloy Steel Plant and the Salem Steel Plant. Later, SAIL was
restructured as an operating company in the year 1978.

SAIL is playing a crucial role in developing a sound infrastructure for the industrial
development of the country since its inspection. It has greatly contributed to the
development of technical and managerial expertise. It has triggered the secondary and
tertiary waves of economic growth by continuously providing the inputs for the
consuming industry (Prathuru, 2012).

4.2 OWNERSHIP AND MANAGEMENT

The Government of India owns about 75% of SAIL's equity and retains voting control
of the Company. However, by virtue of its ‘Maharatna’ status, SAIL enjoys
significant operational and financial autonomy (SAIL, n.d.).

4.3 VISION

To be a respected world Class Corporation and the leader in Indian steel business in
quality, productivity, profitability and customer satisfaction. (SAIL, n.d).

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4.4 BOARD OF DIRECTORS

Table 4.1 shows the present composition of board of directors of Steel Authority of
India Limited.

Table 4.1: Board of Directors of SAIL

No. Designation Name
1. Chairman Shri P K Singh
2. Addl. Secretary & Financial Adviser to the Smt. Bharathi Sivaswami
Government of India Sihag
3. Director – Finance Shri Anil Kumar Chaudhary
4. Director – Technical Shri SSMohanty
5. Director – Personnel Dr. N Mohapatra
6. Director – Projects & Business Planning Shri G. Vishwakarma
7. Director – Raw Material & Logistics Shri KalyanMaity
8. Independent Director Dr. Atmanand
9. Independent Director Shri J.M. Mauskar
10. Independent Director Shri P K Dash
11. Independent Director Prof. Ashok Gupta
12. Independent Director Shri Pramod Bindal
13. Independent Director Smt. Anshu Vaish
14. Director – Commercial Shri Binod Kumar
15. Joint Secretary to the Government of India Shri Sunil Barthwal
Source: SAIL

4.5 PLANTS AND PRODUCTS OF SAIL

SAIL produces and provide vital as well as basic infrastructure facilities across the
length and breadth of India. SAIL is continuously meeting the growing demand for
steel from different sectors contributing in the growth of Indian economy like
infrastructure, railways, power, transportation, defence, oil & gas, heavy industries,
construction, white goods, automobiles, etc. With an unmatched range of mild steel,
both in long and flat categories, as well as a wide variety of special and stainless
steels. Different products of SAIL are as follows:

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Table 4.2: Plants and products of SAIL

Plants State Products

Bhilai Steel Plant (BSP) Chhattisgarh Rails (13/26m), Long Rails, (65-
260m), Blooms, Billets, Slabs,
Channels, Joists, Angles, TMT
Rebars, Wire Rods, Crane Rails,
Plates, Pig iron & Coal Chemicals
Durgapur Steel Plant West Bengal Blooms, Billets, Joists, Narrow
(DSP) Slabs, Channels, Angles, TMT
Rebars, Wheels & Axles, Pig iron &
Coal Chemicals
Rourkela Steel Plant Orissa Plate Mill Plates, HR Plates, HR
(RSP) Coils, Slabs, CR Sheet/ Coil,
Galvanized Sheets (plain &
Corrugated), ERW Pipes, Spiral
Weld pipes, CRNO, Pig iron & Coal
Chemicals
Bokaro steel Plant Jharkand Hr Coils, Slabs, HR Sheets. Plates,
CR Coils. Sheets, GP Sheets. coils,
GC Sheets, Galvanized Steel,
HRPO, Pig iron & Coal Chemicals
IISCO Steel Plant (ISP) West Bengal Wire rods, Bars & Rebars, Joists,
Channels, Angles, Blooms, Billets,
Universal & Special section (Z-bar,
MS Arch), Pig iron & Coal
Chemicals
Alloy Steels Plants (ASP) West Bengal Alloy Steel Squares & Rounds,
Wear Resistant Plates, Forgings,
Carne Wheels, Forged Rolls/ Plates,
Special Quality Slabs & Stainless
Steel Slabs (low Ni, 300 & 400
series)
Salem Steel Plant (SSP) Tamil Nadu Cold Rolled Stainless Steel, Hot
Rolled Carbon & Stainless Steel
Products, Micro-Alloyed Carbon
Steel
Visvesvaraya Iron and Karnataka High Quality Rolled & Forged
Steel Plant (VISL) Alloy & Special Steel Products
Chandrapur Ferro Alloy Maharashtra High/ Medium/ Low carbon Ferro-
Plant Manganese, Silico-Manganese

Source: SAIL

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4.5.1 Integrated Plants

1. Bhilai steel Plant (BSP)

Bhilai Steel Plant (BSP) is India's only manufacturer of rails and heavy steel plates
and a major producer of structural. It was set up with the help of the USSR in 1955.
The plant also specializes in other products such as wire rods and merchant products.
BSP has an annual production capacity of 3.153 Million Tonnes of saleable steel. It is
certified with ISO 9001:2000 Quality Management System Standard, SA: 8000
certification for social accountability, the OHSAS-18001 certification for
Occupational health & safety and IS0:14001 for Environment Management System. It
has bagged the CII-ITC Sustainability award for three consecutive years among the
long list of national awards it has won (SAIL, n.d).

2. Durgapur Steel Plant (DSP)

Established in the 1955, DSP started with an initial capacity of one million tonnes of
crude steel per year which later expanded to 1.6 million tonnes in 70's. Further, with a
massive modernization programme in early 90's, the capacity of the plant increased to
2.088 million tonnes of hot metal, 1.8 million tonnes crude steel and 1.586 million
tonnes saleable steel. The plant is accredited with ISO 9001: 2000 quality
management system, accredited with ISO: 9002 quality assurance certification (SAIL,
n.d).

3. Rourkela Steel Plant (RSP)

The plant was set up with German collaboration in 1955 with an installed capacity of
1 million tonnes which later enhanced to 1.9 million tonnes. The plant has undergone
modernization in the mid-1990s. RSP was the first plant in India to incorporate LD
technology of steel making and the first steel plant in SAIL and the only where 100%
of slabs are produced through the cost-effective and quality-centric continuous casting
route. The present capacity of plant is to produce 2 million tonnes of hot metal, 1.9
million tonnes of crude steel and 1.67 million tonnes of saleable steel. It is SAIL’s
only plant that produces silicon steels for the power sector, high quality pipes for the
oil & gas sector and tin plates for the packaging industry. Expansion project in the

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plant has been implemented with capital investment of around of Rs 12,000 crores for
the massive modernization (SAIL, n.d.).

4. Bokaro Steel Plant (BSL)

Incorporated originally as a limited company on 29th January 1964, BSL later merged
with SAIL. The Plant is the country’s first Swadeshi steel plant. It was built with local
equipment, material and know-how. The modernization of 90s' has further upgraded
the capacity to 4.5 MT of liquid steel. Many other new features have been added by
modernization of plant. Bokaro is producing top quality hot rolled products that are
well accepted in the international market. Bokaro also implements various programme
under its corporate social responsibility (SAIL, n.d).

5. IISCO Steel Plant (ISP)

Established in 1918 with the name Indian Iron & Steel Company (IISCO), ISP
amalgamated with SAIL on 16th February 2006 and renamed as IISCO Steel Plant
(ISP). With time, the plant was upgraded to produce 4.26 lakh tonnes of saleable steel
and 2.54 lakh tonnes of pig iron per annum. ISP produces a wide range of products
that have been acknowledged for their finest quality and enjoys exclusive market
dominance for some products. Currently, ISP is raising its saleable steel capacity to
2.5 million tonnes per annum with the help of Rs.16480 crore modernization-cum-
expansion programme. ISP is the owner of India’s oldest unit that produces pig iron
by modern methods at Kulti. This unit at Kulti was set up in the year 1870 by Bengal
and iron works Co. (BIW). BIW was absorbed by IISCO in 1936 and steel making
started as a regular measure in 1939. Another company named Steel Corporation of
Bengal (SCOB), established in 1937, was also amalgamated with IISCO in 1952
(SAIL, n.d).

4.5.2 Special Steel Plants

1. Alloy Steels Plants (ASP) in West Bengal

It was set up in January 1965 to make India self-reliant in alloy & special steels
production. ASP is located at Durgapur in Burdwan district of West Bengal. It is
spread over an area of around 4.67 Sq. KM (467.22 Hectare). M/s MN Dastur & Co.

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was the Consultant for ASP and the Technology knowhow was provided from M/s
Atlas Steels, Canada. A Japanese Consortium, named JASCON, was the Major
equipment supplier, while the Reheating Furnaces were supplied by Amco, Canada
and Heat Treatment Furnaces supplied by Wellman Incandescent. ASP has been
selected as the site where the world's 2nd largest commercial iron nugget making
plant of 0.5 Million Tonnes capacity based on ITmk3 technology will be set up by
SAIL-Kobe Iron India Pvt. Ltd. (SKIIPL) which is a Joint Venture Company formed
by SAIL with M/s Kobe Steel, Japan (SAIL, n.d).

2. Salem Steel Plant (SSP) in Tamil Nadu

SSP is the supplier of wider width stainless steel sheets/coils in India. It has an
installed capacity of 70,000 tonnes per year in Cold Rolling Mill and 1, 86,000 tonnes
per year in Hot Rolling Mill. In addition, the plant has country's first top-of-the-line
stainless steel blanking facility with a capacity of 3,600 tonnes per year of coin blanks
and utility blanks/circles. Salem Steel Plant is presently going through Expansion and
modernization (SAIL, n.d).

3. Visvesvaraya Iron and Steel Plant (VISL) in Karnataka

Visvesvaraya Iron and Steel Plant (VISL) was set up as the Mysore Iron Works on
January 18, 1923 by Sir M Visvesvaraya. It is a pioneer in production of high quality
alloy and special steels and pig iron. VISL has an installed capacity of 77,000 tonnes
of alloy and special steels and 205,000 tonnes of hot metal. VISL has accredited with
the ISO / TS 16949: 2009 certificate for steel production through rolled and forged
routes and pig iron production (SAIL, n.d).

4.5.3 Ferro Alloy Plant

1. Chandrapur Ferro Alloy Plant

Chandrapur Ferro Alloy Plant is the only Public Sector Unit engaged in production of
Manganese based Ferro Alloys in India. It became a Unit of SAIL on 12th July
2011.The plant is situated at Chandrapur in Maharashtra. It is located 166 km away
from Nagpur on Delhi-Chennai rail route and is well connected by rail & road to the
major cities of India. CFP has an installed capacity of 1, 00,000 Tonnes per Year

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Ferro Manganese. CFP has been certified with Quality Assurance Certificate ISO
9001:2008. The latest technological development in the plant is state of the art Layer
Casting Technology for casting molten Ferro Alloys and Ferro Alloy Processing Unit
which is first of its kind in India (SAIL, n.d).

4.5.4 Subsidiary

1. SAIL Refractory Company Limited

The Government of India took over Burn Standard Company Limited which
underwent a modernization & expansion programme in order to meet the growing
demand of high quality basic refractories in the modern steel plants of SAIL and other
private sector companies. The Salem Refractory Unit of Burn Standard Company
Limited (BSCL) became a wholly-owned subsidiary of SAIL on December 16, 2011.
The unit has now been renamed as SAIL Refractory Company Limited (SRCL).
SRCL is located in Salem in the state of Tamil Nadu. It has an installed capacity of
1500 Million Tonnes per month for manufacturing calcined magnesite, 1200 Million
Tonnes for basic bricks, 500 Million Tonnes for mag-carb bricks, 3000 Million
Tonnes for bulk & monolithic and 2000 Million Tonnes for dunite. SRCL has 1718.3
acres of leasehold mining land spread over three locations. The company has an
estimated quantum of magnesite reserves of about 10 Million Tonnes and about 9
Million Tonnes reserve of dunite (SAIL, n.d).

4.5.5 Other units

 SAIL Consultancy Division (SAILCON)

 R&D Centre for Iron and Steel
 Management Training Institute
 SAIL Safety Organization
 Environment Management Division
 Raw Materials Division
 Growth division
 Central Power Training Institute
 Central Marketing Organization
 Central Coal Supply Organization

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 SAIL Refractory Unit (SRU)

4.6 JOINT VENTURES OF SAIL

Table 4.3 shows joint ventures of Steel Authority of India Limited with various
organizations.

Table 4.3: Joint Ventures of SAIL

S. No. Joint Venture Description
1. NTPC SAIL Power A 50:50 basis joint venture to manage SAIL’s
Company Pvt. captive power plants at Rourkela, Durgapur and
Limited (NSPCL) Bhilai with a combined capacity of 814 megawatts
(MW).

2. Bokaro Power A 50:50 basis joint venture with Damodar Valley

Supply Company Corporation (DVC) is managing the 302-MW
Pvt. Limited power generating station and 660 tonnes per hour
(BPSCL): steam generation facilities at Bokaro Steel Plant.
3. Mjunction Services A 50:50 joint venture with Tata steel to promotes
Limited e-commerce activities in steel and related areas
including e-assets sales, events & conferences, coal
sales & logistics, publications, etc.
4. SAIL-Bansal A joint venture with BMW Industries Ltd. on 40:60
Service Centre bases for a service centre at Bokaro with the
Limited objective of adding value to steel.
5. Bhilai JP Cement A 26:74 joint venture company with Jai Prakash
Limited Associates Ltd to set up a 2.2 million tonne (MT)
slag-based cement plant at Bhilai.
6. Bokaro JP Cement Another 26:74 joint venture company with Jai
Limited Prakash Associates Ltd to set up a 2.1 MT slag-
based cement plant at Bokaro.
7. SAIL & MOIL Ferro A joint venture company between SAIL and
Alloys (Pvt.) Manganese Ore (India) Ltd on 50:50 basis to
Limited produce ferro-manganese and silico-manganese

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required in production of steel.

8. S & T Mining A joint venture company with Tata Steel on 50:50
Company Pvt. bases for joint acquisition & development of
Limited mineral deposits to carry mining of minerals
including exploration, development, mining and
beneficiation of identified coking coal blocks.
9. International Coal A joint venture company/SPV promoted by five
Ventures Private central PSUs, viz. SAIL, CIL, RINL, NMDC and
Limited NTPC with 28.7%, 28.7%, 14.3%, 14.3% and
14.3% shareholding, respectively to acquire stake
in coal mines/blocks/companies overseas for
securing coking and thermal coal supplies.
10. SAIL SCI Shipping A 50:50 joint venture with Shipping Corporation of
Pvt. Limited India to provide various shipping and related
services to SAIL for importing of coking coal and
other bulk materials and other shipping-related
business
11. SAIL RITES Bengal A 50:50 joint venture with RITES to manufacture,
Wagon Industry Pvt. sell, market, distribute and export railway wagons
Limited: including high-end specialized wagons, wagon
prototypes, fabricated components/parts of railway
vehicles, rehabilitation of industrial locomotives,
etc., for the domestic market
12. SAIL SCL Limited A 50:50 Joint Venture with Government of Kerala
where SAIL has management control to revive the
existing facilities at Steel Complex Ltd, Calicut
and also to set up, develop and manage a TMT
rolling mill of 65,000 MT capacity along with
balancing facilities and auxiliaries.

Source: SAIL

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4.7 MEMORANDUM OF UNDERSTANDING (MOU)

To pursue its strategic interests, SAIL has signed Memorandum of Understandings

with several Indian and foreign companies:

Ta b l e 4.4 : Memo ran d u m o f U n d er sta nd i ng ( MOU) o f S A IL

1. POSCO, Korea Strategic alliance for cooperation in a wide range
of business & commercial interest areas
2. Kobe Steel Limited The technical & economic feasibility of ITmk3
(KSL), Japan technology for producing premium grade iron
nuggets using iron ore fines and non-coking coal
3. RashtriyaIspat Nigam For jointly exploring and developing high grade
Ltd. (RINL): low silica limestone deposits of Qalhat in the
sultanate of Oman for supply to steel plants of
SAIL & RINL on a long term basis
4. Larsen & Toubro Ltd To jointly set up, develop, manage and own
(L&T): captive/independent power plant(s) at suitable
location/s to meet future power requirements of
SAIL
5. National Mineral For jointly developing limestone mine at Arki in
Development Solan district of Himachal Pradesh in 50:50 Joint
Corporation (NMDC): Venture which will supply high grade low silica
Limestone primarily to the steel plants of SAIL &
NMDC
6. Hindustan Prefab Ltd For jointly exploring the techno-economic
(HPL): viability of carrying out the business of
prefabricated structures in steel and cement.

7. IRCON For jointly working on infrastructure projects

having transportation by rail/road as a component
both in India and abroad.

Source: SAIL

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4.8 MODERNIZATION AND EXPANSION

During 2014, SAIL took a major step forward on the modernization & expansion
front, with the new 4060 m Blast Furnace (largest in the country) at Rourkela Steel
Plant, operational since August, 2013. It marked a new chapter in the modernization
and expansion of the company. Thereafter, other upcoming facilities at RSP have also
been operationalized. From June 2014, the entire integrated process route comprising
the new Ore Bedding & Blending Plant, 360 sq.m. Sinter Plant, the 7 m tall,3rd Coke
Oven Battery No.6, the 4060 m Blast Furnace No.7, the 3 BOF, 2500 mm Slab Caster
and the Plate Rolling facility in the New 1.0 Million tonne per annum Plate Mill are
operational at RSP. Work in the finishing mill of the Plate Mill will be completed
shortly. The production from these facilities is being ramped up.

4.9 PRODUCTION AND CAPACITY

SAIL produced 12.9 million tonnes (MT) of saleable steel in 2014, an improvement
of 4% over 2013. Production of 14.5 MT of hot metal and 13.6 MT of crude steel was
also 1% higher each than corresponding period of last year, respectively. All-time best
production of special quality & value added products of 5.42 MT was achieved,
which was 6% higher than FY’13. Power Plants maintained the best ever power
generation of 699 MW during 2013-14, with a growth of 1% over last year. During
the year SAIL took a major step forward on the 3 modernizations& expansion front,
with the new 4060 m Blast furnace.

4.10 MANUFACTURING PROCESS

Some of the technological options for converting iron ore to steel products are given
in figure 4.1. Hot metal and crude steel process are also interlinked among themselves
as represented by arrows.

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Figure 4.1: Manufacturing Process of Steel

Source: SAIL

4.11 MAJOR ACHIEVEMENTS

Steel Authority of India Limited has won several awards and accolades for its
excellent performance in various fields. Some of the major achievements are given in
the table 4.5.
Chapter – 4 Profile of Steel Authority of India Limited

Table 4.5: Awards and Accolades of SAIL

YEAR AWARDS AUTHORITY AWARDS DETAIL

2013-14 Hon’ble Prime Minister The Prime Minister’s Trophy for
the Best Performing Integrated
Steel Plant (ISP) in the Country
2012-13 The Hon'ble President of India on SCOPE Award for Best Practices
Public Sector Day function in Human Resource Management
for the year 2011-12
2012-13 Hon'ble President of India Rashtriya Khel Protsahan
Puraskar - 2012
2011-12 Hon’ble Prime Minister MoU Excellence Award‛ for the
year 2010-11
2011-12 Indian Institution of Industrial Performance Excellence Awards -
Engineering 2010‛
2010-11 Union Minister for Home Affairs Golden Peacock Environment
Shri Management Award for the year
P. Chidambaram 2011
2009-10 International quality circle meet, Eight gold, one silver, six bronze
Phillipines, 2009 won by SAIL employees
2008-09 National Institute of Personnel the National Award on SAIL for
Management Best
HR Practices 2008.
2007-08 Ministry of Rural Development, Corporate Social Responsibility
Govt. of India during the National Award
Conference of
Youth Hostels Association
(YHAI).
2006-07 Indian Institute of Metals National Sustainability Award for
2006
Source: SAIL

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4.12 ENVIRONMENT POLICY

SAIL reaffirms its commitment to contributing towards a clean and sustainable

environment and continually enhancing its environmental performance as an integral
part of its business philosophy and value. Towards this commitment, SAIL shall:

 Integrate sound environmental management practices in all the activities.

 Conduct the operation in an environmentally responsible manner to comply
with applicable legal and other requirement related to its environmental aspect
and strives to be beyond.
 Progressively adopting cleaner and energy efficient technologies.
 Minimize waste generation and promote recovery, recycle and reuse.
 Increase greenery in and around the plants and mines.
 Strive for continual improvement in environmental performance by setting
challenging targets, measuring progress, taking corrective action and
communicating environmental information to all concerned.
 Enhance environmental awareness amongst all employees working for and on
behalf of SAIL and the general population living around plants and mines.
 Encourage the business associates to adopt similar approach for environmental
protection.

In order to attain the compliance with environmental laws, SAIL has established
separate department on environment at all the Plant/Units. It has an Environment
Management Division at the corporate level. The Company is also complying with all
the forestry laws as per the laid down conditions. In addition to this, conditions
imposed by the State Government(s) are also complied with. The ongoing
Modernization and Expansion programme of the Company, apart from increasing the
production capacity, also envisages installation of more efficient & environment
friendly technologies and incorporation of latest pollution control technologies and
equipment. The Company is spending about Rs. 5000 crores on pollution control
scheme out of the total outlay of about Rs. 72000 crores for the on-going
Modernization and Expansion programme. Various environmental protection and
conservation measures being undertaken by the Company are mentioned in MD&A
Report.

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4.13 HUMAN RESOURCE POLICY

SAIL has achieved its present level of excellence through investing in its human
resource, whose skill and knowledge constitute the basis of every initiative, be it
technology or innovation. Developing skills and capabilities of employees to improve
manpower utilization and labour productivity is the key thrust area of Human
Resource Management (HRM) in SAIL. SAIL achieved the highest ever Labour
Productivity (LP) of 278 tonnes of crude steel in 2013-14. The manpower strength of
SAIL was 97897 (as on 31.03.2014) with manpower rationalization of 3981 achieved
during the year. Developing Employee Capabilities & Competencies in order to
develop its human resources for harnessing their potential, SAIL has been making
sustained efforts through various training and development activities with focus on
preservation of skills, transfer of skills and knowledge, training in
specialized/advanced skills and technology in collaboration with reputed
organizations and development of effective managerial competencies through
association with premier institutes.

4.13.1 Harmonious Employee Relations

SAIL has a tradition of conducive and fulfilling employee relations environment. The
healthy practice of settling the issues through discussions with trade unions or
workers’ representatives enabled workers’ participation at different levels and
facilitated in establishing a peaceful IR climate. Some of these forums are functioning
since early seventies and are sufficiently empowered to address different issues
related to wage, safety, and welfare of workers.

4.13.2 Grievance Redressal Mechanism

Internal grievances redressal machinery exists in SAIL Plants and Units, separately
for executives and non-executives. The grievance procedure in SAIL has been
evolved after sustained deliberations and involvement of employees, trade unions and
associations. Joint grievance committees have been set up at Plant/Unit level for
effective redressal of grievances. The grievances are dealt through a 3 stage grievance
handling system and employees are given an opportunity at every stage to raise

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grievances relating to wage irregularities, working conditions, transfers, leave, work

assignments and welfare amenities etc.

4.14 SWOT ANALYSIS

4.14.1 Opportunities & Threats for SAIL

a. Opportunities:

 The Indian steel industry is poised for a robust growth over the medium term.
There would be opportunities provided by a rapidly expanding domestic
market.
 Focus on infrastructure projects viz. industrial freight corridors, new ports and
new cities planned along the freight corridors provide opportunities for
enhanced steel consumption.

b. Threats:

 Intensification of competition from domestic as well as foreign steel

producers.
 Fall in international steel prices due to decline in raw material prices both for
iron ore & coking coal.
 Excess steel capacity in the country could lead to a margin squeeze.
 Slowing growth in China could potentially increase competition from cheap
imports.

4.14.2 Strengths & Weaknesses

a. Strengths

Strengths of SAIL include diversified product mix, well established nationwide

marketing network, captive iron ore resources, skilled manpower, captive power
plants, land bank for future expansion, dedicated R&D wing and strong balance sheet.
Further, the on-going modernization is going to take SAIL ahead in terms of modern
technology adoption, automation, product quality, bigger product basket, process
efficiency & diversification opportunities. The diversified product mix and multi-

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location production units are an area of strength for the Company. Also, it has a
nationwide distribution network, with presence in every district in India. SAIL has the
largest captive iron ore operations in India, which takes care of its entire requirement.
With plans in place to expand the mining operations, the Company will continue to be
self-sufficient in iron ore after completion of the on-going phase of expansion. SAIL’s
large skilled manpower base is a source of strength. With emphasis on selective
skilled recruitment for manning of upcoming facilities and recoupment against
superannuating manpower, the manpower profile as well as the labour productivity
will improve gradually over the years. SAIL’s captive Power Plants take care of about
70% of its total power need. With augmentation of capacities of Power Plants
operated under Joint Venture, the Company will continue to have security in this key
input in future as well. The Company has one of the biggest in-house research and
development centres in Asia. SAIL’s RDCIS (Research & Development Centre for
Iron & Steel) is a source of regular product and process innovation. Low overall
borrowings lend strength to the Company’s Balance Sheet as it can mobilize resources
while keeping the leveraging at manageable levels.

b. Weaknesses

Dependence on external sources for key input like coking coal leads to exposure of
the Company to the market risk. Regular superannuation in large numbers, over the
years, has resulted in skill depletion largely in the technical areas. Transfer of skill
and knowledge has to be given thrust. Besides, technological up-gradations and
modernization also call for consistent efforts towards competency development of
employees. Adverse employee age mix, with the average age of 47 years is a serious
concern. Skilled and competent manpower is required to move to a more favourable
manpower age profile. A part of the operations in the Company continues to be from
energy inefficient processes viz. open hearth and ingot route of production, which will
be eliminated only after the completion of the current expansion program. At present
around 20% of the products are in the form of semi-Finished Steel, resulting in lower
value addition. This will continue till new rolling mills planned under current
expansion programme contribute to value addition, as almost all semis will be
converted to Finished Steel.

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4.15 CORPORATE GOVERNANCE

The philosophy of the Company in relation to corporate governance is to ensure

transparency, disclosures and reporting that conforms fully to laws, regulations and
guidelines, and to promote ethical conduct throughout the Organization, with the
primary objective of enhancing shareholders value, while being a responsible
corporate citizen. The Company is committed to conforming to the highest standards
of corporate governance in the Country. It recognizes that the Board is accountable to
all shareholders and that each member of the Board owes his/her first duty for
protecting and furthering the interest of the Company.

4.16 CORPORATE SOCIAL RESPONSIBILITY

From the establishment of SAIL in 1973, a system was put in place for socio-
economic development of the neighbourhoods and communities operated by SAIL’s
plants and units to minimize inequalities among the people by providing them quality
education, healthcare, infrastructure and employment avenues, while simultaneously
promoting scientific temperament and modern technology. SAIL has taken effective
measures in the field of environment conservation, health and medical care,
education, women’s upliftment, providing potable drinking water and ancillary
development at each of its plants and units. By which, SAIL has contributed greatly in
the economic development of these areas.

 Peripheral Development

Under Peripheral Development SAIL’s plants and units undertake different activities
around the plant and units up to a radius of 16 kms. Programmes are undertaken by
each plant in the area of road connectivity, construction of bridges/culverts, access to
improved water sources, etc, in close coordination with the State and District
administrations as well as the local Panchayats, social organizations and people's
representatives.

 Medical and Health Care

The company provides healthy living conditions for its employees as well as the
people living in peripheral areas. SAIL has established 54 primary health centre, 12

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reproductive & child health (RCH) centre, 17 hospitals and 7 super-speciality

hospitals to provide modern health care to more than 30.60 million people. These
centres celebrate occasions such as World Health Day, World Blood Donor Day, and
Newborn Week etc., to enhance awareness and sensitize people on health-related
issues. SAIL has been implementing an AIDS awareness & control programme in
partnership with the National AIDS Control Organization (NACO), Ministry of
Health & Family Welfare, since 1999-2000. SAIL is also participating in other
national health programmes like TB control, anti-malaria, leprosy eradication etc.

The company also organizes a number of health camps at various villages for
immunization, blood donation, etc and to bring about awareness on health-related
issues by distributing water purification tablets, handbills and other means of audio-
visual communication. In 2009-10, more than 3850 camps were organized where over
2.32 Lakh of people got benefitted.

 Preservation of Art & Culture

SAIL has been contributing to the preservation of traditional forms of Indian art and
culture. Performers are regularly invited and felicitated by SAIL. SAIL also organizes
live shows and concerts and encourages their reception and appreciation in the
society. SAIL provides financial help to organizations like SPICMACAY to promote
classical arts. SAIL is preserving the Lodhi Tomb complex in New Delhi, Along with
Archaeological Survey of India. Developmental work has also been undertaken by
SAIL plants at various archeological sites in India.

 Environment

SAIL carry plantation across all its plants and mines. SAIL restored 200 acres of
degraded land through afforestation at Purnapani flux mines of SAIL in Orissa.
Pisiculture has been done in the abandoned quarries at Purnapani and 300,000
fishlings have been released in the quarry waters. Plantation of 10,000 saplings in 10
acres of degraded land has been planned. Out of that, plantation of 4,000 saplings has
been completed at Barsua Iron Ore Mines. Recently, Medicinal plantation of Amla
was undertaken in Chhatisgarh region. SAIL has signed an agreement with

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Department of Bio-technology, Government of India and Centre for Environment

Management for Degraded Eco-system.

 Roads

SAIL has been actively involved in the construction and repair of roads, thereby
providing connecting facilities to nearly 2 lakh people across 329 villages every year.
SAIL constructed a road, connecting the Salem plant to National Highway 7 in Tamil
Nadu. In the year 2009-10, 103.35 kms of road were constructed benefiting 17,24,114
people. Till March 2010, more than 73 lakh people, across 435 villages, reaped the
advantage of the modern network of roads built by SAIL.

 Creating Sustainable Incomes

SAIL is constantly working to impart training and help to the communities to make
them self-sustaining units that can generate incomes for themselves. People living in
the peripheral area of SAIL's plants/ units are taught the skills that will help them to
merit more than two square meals a day. During the last three years, SAIL has
provided vocational training to around 44,000 people in and around SAIL
Plants/units.

 Ancillary Development

Good suppliers are intangible assets to any organization. SAIL has been supporting
ancillary industries by providing land, supply of potable water, infrastructure
facilities, consultation for developing the industry, publication of printed matter to
inform the entrepreneurs of SAIL's requirements, special exhibitions of parts and
drawings to get the exact specifications and ideas, exemption from paying EMD,
security deposit etc. SAIL also provides handling equipment to these industries on
hire basis, testing facilities providing available raw materials for manufacture, etc. For
ancillarisation and industries development in the Chattisgarh region, the Government
of Madhya Pradesh had conferred the prestigious 'Sahayak Udyag Mitra' award on
Bhilai Steel Plant in 1997.

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 Women Upliftment

Since the inception of SAIL, Mahila Samities have been formed in all SAIL’s plant.
The Samities are comprises of spouses of the employees as its members. Spouses of
MDs, EDs etc, are also a member of Mahila Samitie. The various activities being
performed by the Samities includes:

 women empowerment and development

 community welfare activities
 assistance during natural calamities
 manufacturing products for general use in plants
 providing assistance to women belonging to economically weaker section
etc
 providing vocational training to women
 facilitating access to education for needy girl children

 Model Steel villages

SAIL has adopted 79 villages across 8 states to develop them as Model Steel Villages
(MSVs) in a phased manner. The developmental activities undertaken in these
villages include medical & health services, education, roads & connectivity,
sanitation, community centres, livelihood generation, sports facilities. By March
2012, the development of 71 MSVs has successfully been completed.

 Family Welfare

All SAIL hospitals have participated in the National Reproductive and Child Health
programme (RCH). SAIL also participates in other National Health Programmes like
National Tuberculosis Program, anti-Malaria, Anti Leprosy Program etc. There are 20
hospitals including 4 state-of-art hospitals situated throughout the country having a
total strength of around 4000 beds for the benefit of employees, their dependents and
the peripheral population. They are managed by trained medical staff of around 4000
people.

SAIL promotes the Government’s Small Family Norms. In a scheme for promoting
family planning, an incentive of Rs. 400 is being provided for a tubectomy operation,

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Rs. 500 for a vasectomy operation and Rs. 50 to family planning motivator for each
case. In another scheme for employees, Rs.2000 is given to an employee with two or
less children, for a sterilization operation.

SAIL has launched HIV/AIDS awareness and control program in partnership with
National AIDS Control Organization (NACO), Ministry of Health and Family
Welfare. Till date, about Rs.32 million have been received for implementing the
policies of NACP-II in all plants/units. Till date, 1.1 Lakh employees and around six
Lakh non-employees have been covered under Information, Education &
Communication (IEC) Awareness Campaign. SAIL has launched School AIDS
Education Programme, covering 111 schools, 3000 teachers and 35,000 students.

4.17 FINANCIAL HIGHLIGHTS OF SAIL

SAIL is India’s largest steel producing company. The company is among the seven
Maharatnas of the country’s central Public Sector Enterprises. Some of the major
activities indicating the financial highlights of Steel Authority of India Limited are
given as follows:

Figure 4.2: Net Worth of Steel Authority of India Limited

Net Worth (In Rs. Crores)

50000
45000
40000 42666 43505
35000 39811 41025
37069
30000 33317
25000 28148
20000 23004
15000 17184
10000 12386
5000 10011
0

Source: SAIL

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Figure 4.4 depicts net worth of SAIL during 2005 & 2015. It can be seen from figure
4.4 that net worth of SAIL has been in increasing trend during the last decades. Net
worth of SAIL has become four times during the study period. Net worth of SAIL
increased from Rs. 11011 crores on 31-03-2005 to Rs. 43505 crores on 31-03-2015.

Figure 4.3: Net Sale of SAIL from 2005-06 to 2014-15

Net Sales (Rs Crores)

50000

45000 46662 46938

44975 45952
40000 43219 43399
39577 40577
35000
33950
30000

25000 28128

20000

15000

10000

5000

0
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

Source: SAIL

Figure 4.1 demonstrates the net sales trends of SAIL from 2005-06 to 2014-15. Net
sales of SAIL have been in a fluctuating trend during the last decades. Net sales of Rs
28128 crores in 2005-06, increased to become Rs 43219 crores in 2008-09. However,
SAIL experienced a decline in the net sales in year 2009-10 when the net sales
dropped to Rs 40577 crores. This decline was an impact of global economic
recession. However, it recovered and rose to Rs 46662 crores in 2011-12. In 2012-13,
it again declined to Rs 44975 due to slow demand condition in the economy, but rose
to Rs 46938 in 2013-14 and again declined to Rs 45952 in last year of the study.

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Figure 4.4: Saleable Steel production of SAIL from 2005-06 to 2014-15

Saleable Steel Production (In million

Tonnes)
13.2

13
13
12.8 12.9 12.9
12.8
12.6
12.6 12.6
12.4 12.5
12.4 12.4
12.2

12 12.1

11.8

11.6
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

Source: SAIL

As depicted in figure 4.4 saleable steel production of SAIL has been in fluctuating
trend during study period. Saleable steel production increased from 12.1 MT in 2005-
06 to 13.0 MT in 2007-08. Due to economic recession, saleable steel production
declined to 12.5 MT in 2008-09. However, production of saleable steel recovered to
become 12.9 MT in 2010-11. It again dropped to 12.4 MT in 2012-13 due to slow
economic condition in the economy. Production of saleable steel increased to 12.9
MT in 2013-14 but again dropped to 12.8 MT in the last year of the study.

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